Germany Renewable Energy Market | Size, Share, Trends and Forecast to 2028

The global energy landscape is going through a major shift towards renewable-based energy generation. This energy transition was possible after a decade of rapid technological advancement and a favorable regulatory environment. Additionally, factors such as decreasing costs of renewable energy sources and increasing competitiveness of battery energy storage technologies are expected to contribute to accelerated renewables deployment in the coming years. 

Furthermore, as the concern for climate change and support for environmental, sustainability and governance (ESG) considerations grow, the demand for clean and green power is expected to increase from almost all end-users.

The renewable energy market consists of the establishments primarily engaged in operating renewable electric power generation facilities. The power generation can be from a variety of sources, including solar energy, wind energy, small hydro, bioenergy, geothermal and marine. The electric energy produced in these establishments is provided to electric power transmission systems or to electric power distribution systems.

Germany Energy Mix

The major sources of energy in Germany are mineral oil, natural gas, renewable energy, coal, and nuclear power. Mineral oil and natural gas still dominate the energy mix of the country with 31.8% and 26.7%, respectively. 

In terms of electricity generation, renewable energy sources provided more electricity than all fossil fuels (coal, gas, and oil) combined in 2021, and now account for 41 percent of German electrical demand.  

The primary energy consumption in Germany increased by 2.6% to 12,193 PJ in 2021 compared to the previous year. The absolute increase was 303 PJ. According to the Working Group on Energy Balances, however, it is still visibly below the 2019 level, which indicates that the energy and overall economic development in Germany is still being shaped to a large extent by the corona pandemic and its effects. Factors that increased consumption were both the economic recovery and the cooler weather compared to the previous year. 

Germany Renewable Energy Market Scenario

The "Energiewende," Germany's transition to a secure, environmentally friendly, and commercially successful energy future, entails a large-scale reform of the energy supply system to increase the use of renewable energy in all sectors. While the transition to renewables in the power sector has been quite effective thus far, progress in other sectors has been slower. 

Renewable energy in Germany is mainly based on wind, solar, biomass, and hydro. The installed capacity of Solar energy in Germany was 58,461 MW, while for wind, it was 63,760 MW. In 2021, the capacity increased by 8.8% and 2.52% for solar and wind, respectively, relative to 2020. 

Germany Solar Power 

Despite being among the countries with the fewest sunshine hours, Germany is one of the largest solar power producers in the world. According to International Renewable Energy Agency (IRENA), With an installed capacity of nearly 59 gigawatts (GW) in 2021, Germany ranked 4th globally in terms of solar power installed capacity.

In 2021, German photovoltaic systems generated around 48.4 TWh of power, of which approximately 44.6 TWh was sent into the public grid and 3.8 TWh was self-consumed. 

According to Fraunhofer ISE (Institute for Solar Energy Systems, Germany), all solar operators combinedly produced around 10% of the country's net power consumption in 2021, out of a total renewables share of slightly under 46%.

Germany added about 5.3 GW of solar power capacity in 2021, 10% more than the previous year but far less than during its boom years around 2010.

In the first quarter of 2022, two states in Germany namely North Rhine-Westphalia (NRW) and Baden-Württemberg (Baden-Württemberg) established a solar-PV obligation for some construction projects, and many other states are expected to follow suit with similar laws.

In its coalition agreement, the national government suggested making rooftop solar essential for new commercial buildings and establishing it "as a rule" for new private buildings. The government also committed to making more agricultural land and moorland available for solar PV projects.

After a tough period around 2015, business confidence in Germany's solar power industry has fully recovered.

The German government's announcement in 2022 to aim for 100 percent renewables in the electricity sector by 2035 is likely to boost investor confidence, as expansion levels must be multiplied. This assumption appears to be supported by the first oversubscribed auction in early 2022, which received more offers than it could award despite the increasing volume.

(For more insights and analysis, consider our report on Germany Solar Power Market)

Germany Wind Power

Onshore wind power is a key component of Germany's energy transition to low-carbon electricity generation, and it has grown to be one of the country's most important power sources.

Wind power became Germany's main power source for the first time in 2019 when it combined with offshore turbines, which produced approximately 25 TWh (4 percent of total) in 2021. Onshore wind power generated about 20% of Germany's net power output in 2020, and wind power produced more than a third of power production in the first three months of 2022.

Onshore wind power generation accounted for around 89.5 TWh, whereas offshore production accounted for approximately 24 TWh. The North Sea generated around 18.5 TWh, whereas the Baltic Sea generated 3.5 TWh.

Onshore wind power provided around 92 terawatt-hours (TWh) of electricity into the grid and contributed just under 16 percent of total power generation in 2021, making it the single most important renewable energy source.

By the end of 2021, the country had 28,230 onshore turbines with a total capacity of around 56 gigawatts (GW). The year 2017 saw the most capacity growth till now, with a gross expansion of approximately 5.3 GW. Expansion then fell to less than 1 GW in 2019 and 1.6 GW in 2021. The current growth goal is to add 10 GW of capacity each year by 2025, with a total capacity of 115 GW installed by 2030.

Wind power generated around 113.5 TWh of electricity, compared to 132 TWh in 2020. This decrease in output was driven by lower wind speeds. Wind power was once again Germany's primary source of electricity, followed by lignite, nuclear, gas, solar, hard coal, biomass, and hydropower.

Despite the constraints of wind turbine construction, onshore wind power production has been rapidly increasing in recent years, but it suffered a setback in 2021 due to unfavorable weather conditions and stagnant capacity increase.

(For more insights and analysis, consider our report on Germany Wind Power Market)

Solar and wind combinedly produced around 162 TWh of electricity in 2021, a decrease of approximately 15 TWh from 2020. Following an above-average wind year in 2020, 2021 was below-average for both wind and solar.

Hydropower generated 19.4 TWh of electricity, up from 18.2 TWh in 2020. With little change in installed capacity, biomass generated slightly more power (43 TWh) in 2021 than it did in 2020.

Geothermal systems were able to significantly increase their contribution to electricity and heat generation in 2021. The contribution of renewables to cover the entire PEV reached a share of 16.1% in 2021 (2020: 16.5%).

The primary energy consumption of renewable energies fell slightly by 0.2% to 1,962 PJ. Biomass, which accounts for more than 50% of renewable energies, recorded a 4% increase in consumption. Hydroelectric power generation increased by a good 5%. On the other hand, there was a sharp decline in electricity production from wind turbines on land, and also at sea.

In all, renewable energy sources produced around 225 TWh in 2021, which is approximately 6% less than the amount of 240 TWh in 2020. Renewables now account for 45.7 percent of public net power generation, down from 50 percent in 2020.

Germany Renewable Energy Policy

Germany Renewable Energy Act (EEG), which was implemented 20 years ago, is responsible for tremendous growth in onshore wind, solar PV, and biogas by giving these power sources grid priority and ensuring generous feed-in tariffs. These renewable sources, along with offshore wind and hydropower, currently account for half of the country's electrical consumption.

The latest modifications to Germany's Renewable Energy Act (EEG) went into effect on January 1, 2021, following two major reforms. The EEG 2021, as it is named by the Ministry for Economic Affairs and Energy (BMWi), was adopted by the federal parliament (Bundestag) in December 2020 after certain changes were made.

The amendments incorporated new developments such as the 2020 national hydrogen policy and e-car charging electricity prices. The government intends to propose how and when renewables subsidies under the EEG might be completely phased out by 2027, assuming a market-driven renewables boom.

Germany intends to combat the climate catastrophe and its reliance on fossil fuel imports by hastening the deployment of renewables through a significant revision of critical energy regulations.

The country intends to open up new territory for green energy production, expedite permit procedures, and significantly accelerate wind and solar additions in order to meet all of its electricity demands with renewable sources by 2035, up from its prior target of abandoning fossil fuels "far before 2040."

In 2022, the newly elected coalition government in Germany has approved the "Easter Package," a package of measures to encourage renewable energy expansion in the country, which includes a target of generating 215 GW of solar power capacity by 2030 under a new Renewable Energy Sources (EEG) Act.

The initiatives aim to reduce the country's dependency on imported Russian gas and to increase the number of renewables in the country's electrical mix to 80% by 2030.

Recent Trends 

In recent years, technology advancements, incentive programs, and an increase in installed capacity have significantly reduced the cost of decentralized energy generation in Germany. 

Since 2006, the price of a solar rooftop system in Germany has dropped by 70%. Battery pricing has followed a similar pattern. As a result, the government has lowered financial incentives for the installation of new renewables, namely photovoltaics.

What do we cover in the Report?

Blackridge Research’s Germany Renewable Energy Market report contains the installed capacity of renewable power generation sources (year-on-year) until 2028, the list of ongoing and upcoming renewable power generation projects such as solar photovoltaic farms, concentrated solar power projects, onshore wind, and offshore wind energy projects and the regulatory scenario within the renewable energy market of Germany.

Furthermore, the report will contain the drivers and restraints within Germany Renewable Energy Market along with a meticulous evaluation for their impact in the near-, medium-, or longer term. Factors affecting renewable energy deployment include market conditions (e.g., cost, diversity, proximity to demand or transmission, and resource availability), policy decisions (e.g., tax credits, feed-in tariffs, and renewable portfolio standards) as well as country specific regulations. Finally, the presentation would enable one to identify market opportunities and plan for long-term growth.

The impact of the COVID-19 pandemic is an integral part of the report.

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