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From energy transition to carbon neutrality

The solution to the climate crisis is inextricably linked to an energy transition: In order to noticeably reduce carbon dioxide emissions, humanity must switch from fossil fuels to renewable energy sources as soon as possible. This has been known for many decades, but most industrialised nations are lagging miles behind this goal.

In Germany, too, development is slower than it should be. Hence, the first real push for the energy transition came under a different buzzword: nuclear phaseout. In June 2011, in view of the Fukushima reactor disaster, the German government decided to withdraw from nuclear energy production. This marked the start of an accelerated grid expansion for renewable energies and activities to increase energy efficiency. The Federal Climate Protection Act (Bundes-Klimaschutzgesetz, KSG), passed in 2021, gave the energy transition another boost in order to banish fossil fuels from the energy supply system sooner.

The goal is to make Germany a carbon-neutral industrialised country by 2045. Instead of oil, coal, gas, or nuclear power, electricity in Germany is to come mainly from wind, sun, water, or biomass in the future. In 2030, at least 80 percent of Germany's electricity consumption is to be generated from renewable energies.

A pie chart showing the shares of different forms of energy in gross electricity generation in Germany in 2022
© VDI Technologiezentrum GmbH

In 2022, around 45 percent of electricity in Germany was generated from renewable energies (see chart on gross electricity generation). However, coal was still the most important energy source in 2022: one third (31 percent) of the electricity generated in Germany came from coal-fired power plants.

The German Federal Environment Agency (Umweltbundesamt) states that to increase the share of renewable energies in electricity generation to 80 percent by 2030, the capacities must be expanded threefold.1 In addition, the transformation poses major challenges for the electricity grid. The system has to be rebuilt from scratch. In the past, electricity supply has been dependent on a few centrally controlled large power plants. Today, new, small players, including private households, are feeding electricity into the distribution grids in a decentralised manner. In addition to new legal framework conditions, this requires completely new technologies and billing systems – a complex task with many interdependencies and interactions.

Although public support for the energy transition was high at the beginning, the mood of optimism weakened considerably when it came to the concrete implementation of measures. One reason for this is the so-called “Not in my backyard” effect (NIMBY), which repeatedly leads to protests from residents when, for example, new power lines are to be laid or solar parks are to be built in the immediate vicinity. Renewable energy expansion plans also come into conflict with nature conservation interests, and last but not least, private households are financially burdened. In 2018, Armin Grunwald, Professor of Philosophy of Technology at the Karlsruhe Institute of Technology (KIT) and member of the BMBF Foresight group, explained that the energy transition is much more than “the replacement of old technology with new technology”. He pointed out that social upheavals, ethical debates, discussions about justice, and problems of acceptance are the real reasons “why the energy transition is much more difficult than was expected in 2011“.2

These challenges become evident in the current discussions surrounding the planned amendment to the Building Energy Act (Gebäudeenergiegesetz, GEG). According to Grunwald, the transformation of energy production and distribution is a generational project that affects us all. He states that, among other things, a fair distribution of these costs and a transparent approach to planning are of the utmost importance.

A bar chart showing whether the energy transition has become more important or less important for different income groups
© VDI Technologiezentrum GmbH

Despite all the difficulties, however, a recent survey conducted by KfW Research in 2023 proves that approval for the accelerated expansion of renewable energies is “overwhelmingly high across different population groups” at 92 percent.3

The KfW Energy Transition Barometer 2022 also shows that the energy transition has become more important for many households (see column chart). On average, 30 percent of households said that the energy transition had become more important to them in the past year, and only just under 6 percent thought it had become less important. It should be emphasised here that a slightly disproportionate increase in importance was recorded in particular among households with the lowest income (lowest income quartile Q1).

At the same time, the willingness of households to act increases with trust and perceived fairness. On a scale of zero (no willingness) to ten (very high willingness), the average score is 6.1. However, it was significantly higher among households that believe in fair compensation (6.8) than among households that do not believe in fair compensation (5.8).4