Germany's Energy Transition: A Trillion-Euro Challenge

The German Chambers of Industry and Commerce (DIHK) has issued a warning regarding Germany's current energy transition strategy, predicting potential costs as high as €5.4 trillion by 2049. This massive expenditure poses a significant burden for businesses and households, threatening the country's economic competitiveness.

Berlin's ambitious target of covering 80% of its electricity needs with renewables by 2030 is part of its broader goal to achieve climate neutrality by 2045. Despite advances in wind and solar energy, Germany continues to face some of Europe's highest electricity prices, with future projections indicating further spikes due to necessary grid investments.

DIHK President Peter Adrian emphasized the risk of current policies driving energy-intensive industries out of the country. A study by Frontier Economics highlights the need for increased annual private investment in energy sectors, predicting energy system costs of up to €5.5 trillion between 2025 and 2049. The study calls for cost-effective measures and international coordination to potentially save €1 trillion, urging stronger carbon trading, less regulation, and increased use of hydrogen networks.

(With inputs from agencies.)