Germany: Climate neutrality rests on renewables and the expansion of electricity and hydrogen networks

Germany must enable energy to be transported across its regions as efficiently as possible to achieve climate neutrality by expanding its electricity and hydrogen networks. The country must also significantly increase the flexibility of energy consumption. This is according to a study by the Fraunhofer ISE research institute.

The study analyzes various ways of achieving climate neutrality in Germany by 2045. It maps social and geopolitical developments across four scenarios and examines the transformation of the energy system at the federal state level. The study covers developments in the energy sector, industry, buildings and transport, and also takes into account the deployment of negative-emissions technologies.

Expanding electricity and hydrogen infrastructure is key to transporting energy between the north and the southern states with large industrial sectors, the report says. The federal states with the best conditions for generating wind power—Schleswig-Holstein, Lower Saxony and Mecklenburg-Western Pomerania—should supply one-third of Germany’s primary energy by 2045, also by becoming domestic hydrogen suppliers.

Electricity consumption in these federal states is expected to surge thanks to electrolyzers. The authors expect the largest expansion of battery storage in states with high photovoltaic capacity.

According to the study’s authors, a paradigm shift towards more flexible operation of the power system is needed. Alongside grid expansion and storage capacity, this can be supported by demand-side flexibility through electrolysis, particularly in the northern federal states, and by flexibly meeting peak demand with gas-fired and hydropower plants in industrial states.

Wind power and photovoltaics are the main pillars of Germany’s energy transition, the report says. While photovoltaic expansion is currently progressing positively, onshore wind power expansion is currently slow in some federal states.

Under the technology scenario, installed onshore wind capacity should double in all regions by 2030 compared with today. By 2045, around 290 GW of installed onshore and offshore wind capacity will be needed. Installed photovoltaic capacity should rise to around 420 GW by 2045.

In all scenarios, direct electrification is the most cost-effective option for achieving the country’s climate targets and ensuring energy supplies. This means that by 2045, the year Germany aims to become climate-neutral, heat pumps must become the dominant heating technology, most transport must be electrified, and the share of electrification in industry must rise to 70%. Hydrogen would play a complementary role in industry, transport and power plants, the study’s authors write.