1、CCS&HYDROGENELECTRICITY&GAS A national forecast to 2050ENERGY TRANSITION OUTLOOK GERMANY 2025FOREWORDGermany has long been a front runner in the energy transition and has established a national target to achieve a net zero energy economy by 2045.Our investigation finds that Germany will miss this ta

2、rget but by a narrow margin.We forecast that emis-sions will fall by 95%by 2050.That is a very big step towards decarbonization and is largely facilitated by a more than doubling of electricity use across the country in the next 25 years.Electrification brings efficiency benefits,which can be seen i

3、n the energy intensity of the economy(i.e.energy use per unit of GDP),which will almost halve during our forecast period.Perhaps the most startling benefit of the transition ahead for Germany is that by building out domestic renewable generation,including biogas,Germany will advance from a position

4、where it currently imports 70%of its primary energy to a position where its energy system will be just 27%reliant on imports.The big question is whether all these benefits can be achieved at acceptable cost.Given the extraor-dinarily high gas and electricity prices that Germany has endured in the re

5、cent past,there is no small anxiety attached to this question.Our analysis shows the transition is affordable in Germany.Here,I encourage you to read our findings in detail,but our overall conclusion is that German industry will be paying energy prices on par with the rest of Europe throughout our f

6、orecast period.This implies energy costs that are moderately higher than some other world regions,but not to the degree that energy becomes barrier to success:other Draghi elements of competitiveness will be more important.Overall,we forecast that Germany will achieve a very much more sustainable en

7、ergy system while not sacrificing the other two corners of the energy trilemma:affordability and energy security.The same logic applies globally:renewably-generated electricity is growing rapidly worldwide because it makes sense environmentally,economically and in terms of energy security.That is th

8、e long arc of development,despite attempts by certain countries to promote fossil fuels in the short term.That is not to say that the transition is straight-forward.A great deal of investment is at stake some EUR 3.3 trillion needs to be spent on energy infrastructure alone in the coming decades in

9、Germany.Also,those industries that are currently heavily reliant on fossil fuels will need to decarbonize by investing in electrification,bioenergy,hydrogen,and carbon capture and storage.Each of those options invariably involves large upfront costs,and in the case of hydrogen it will only be late i

10、n the 2030s that we see hydrogen costs starting to decline to levels that do not require subsidies.For all the opportunities and challenges that lie ahead,DNVs team of energy experts stands willing and prepared to help our customers transition smarter and faster.I am delighted to introduce this fore

11、cast of Germanys energy transition to 2050,which builds on DNVs well-established global and regional energy transition outlooks,which are forecasts and not scenarios.This report is the result of collaboration between our central energy transition research team,our energy system experts in Germany,an

12、d our network of customers and other experts there,to whom we are very grateful.Remi EriksenGroup President and CEO DNVGermany will achieve a very much more sustainable energy system while not sacrificing the other two corners of the energy trilemma:affordability and energy security.2DNV Energy Tran

13、sition Outlook Germany 2025HYDROGEN&CCS COMPETITIVENESSELECTRIFICATIONINVESTMENTSEMISSIONSENERGY DEMANDENERGY SUPPLYPOLICYCONTENTS!Click on the section you want to explore Foreword 2 Executive summary 4 1 Introduction 8 1.1 About this Outlook 8 1.2 General assumptions 112 Energy and climate policy 1

14、2 2.1 Status quo and long-standing transition motivations 12 2.2 Germanys transition and climate ambitions 14 2.3 The German energy and climate change policy approach 15 2.4 Policy factors in ETO Germany 193 Energy demand 21 3.1 Transport energy demand 23 3.2 Buildings energy demand 28 3.3 Manufactu

15、ring energy demand 33 3.4 Non-energy use 374 Energy supply 38 4.1 Electricity 39 4.2 Hydrogen 53 4.3 Fossil fuels and bioenergy 63 4.4 Heat 745 Electrification 75 5.1 Power grids 76 5.2 Storage and flexibility 80 5.3 Electricity market design 836 Natural gas,hydrogen and CO2 infrastructure 88 6.1 Hy

16、drogen and gas infrastructure needs 89 6.2 CCU/CCS 937 Competitiveness of Germanys Industry 988 Energy expenditures 105 8.1 Energy infrastructure investments and financing 105 8.2 The impact of energy efficiency 116 8.3 Energy import dependency 1199 Emissions 121 References 126The project team 130DN

17、V Energy Transition Outlook Germany 2025HIGHLIGHTS1.Germany will electrify 46%of energy demand by 2050,up from 19%today 2.Energy imports are 70%of Germanys primary energy today but will fall to just 27%by 2050 3.Natural gas and hydrogen will co-exist by 2050,with similar demand levels and one-third

18、of the hydrogen produced domestically4.CO2 emissions will fall by 89%by 2045 and by 95%by 2050 compared with 1990.This means that the 2045 climate neutrality target will not be achieved5.EUR 3.3 trillion will be invested in energy infrastructure in the next 25 years6.Energy prices from an increasing

19、ly renewables-dominated system will not disadvantage German industry,but,as elsewhere,fossil fuel-heavy industries will need to adapt their production processes to decarbonize.EXECUTIVESUMMARY4DNV Energy Transition Outlook Germany 2025HYDROGEN&CCS COMPETITIVENESSELECTRIFICATIONINVESTMENTSEMISSIONSEN

20、ERGY DEMANDENERGY SUPPLYPOLICY The continued expansion of domestic renewables is the main factor in this shift,with electricity production doubling from today to reach 1,050 TWh by 2050 98%of which will be renewable.Many demand sectors will electrify,such that electricitys share of final demand will

21、 steadily increase from 19%in 2024 to 46%by mid-century.Policies and reducing technology costs will drive electrification.By mid-century,less than 3%of the vehicle fleet will use combustion engines,one third of household heating will be provided by heat pumps,and fossil fuels will only provide one t

22、enth of manufacturing energy.Electrification leads to significant efficiencies in the entire energy system.Germanys GDP will grow 28%by 2050,but by then it will be using 33%less primary energy than today.Per unit of GDP,energy use will reduce by 48%.With the phase-out of coal-fired power by 2038 and

23、 increased residual load,firm capacity becomes critical in 2030s,leading to 42 GW of gross addition H2-ready/natural gas fired power plants by 2050.Germany will fall somewhat short of its 2045 renewable targets,achieving 325 GW of solar PV compared to the target of 400 GW,142 GW of onshore wind agai

24、nst 160 GW,and 66 GW of offshore wind compared to 70 GW.Germany will dramatically reduce its energy imports;with domestic production supplying 73%of its energy needs in 2050 compared with 30%today.In absolute terms,imported primary energy reduces from 8 EJ to 2 EJ a 75%reduction.Imported coal and oi

25、l,for example,decline 99%and 79%respectively between 2024 and mid-century.The nation will,however,remain reliant on inter-national supply chains to build the infrastructure required for its transition.Germany will electrify 46%of energy demand by 2050,up from 19%todayEnergy imports are 70%of Germany

26、s primary energy today but will fall to just 27%by 20505DNV Energy Transition Outlook Germany 2025HYDROGEN&CCS COMPETITIVENESSELECTRIFICATIONINVESTMENTSEMISSIONSENERGY DEMANDENERGY SUPPLYPOLICY In 2050,demand for hydrogen and its derivatives as an energy carrier will reach 250 TWh/yr,primarily drive

27、n by hard-to-electrify manufacturing and transport sectors,while natural gas demand will be at 290 TWh.Biomethane will grow from 1%today to 27%of the gas in Germanys gas grid by 2050,making up 77 TWh out of the 290 TWh gas supply.Hydrogen use in H2-ready power plants will remain limited through to 2

28、050 due to high costs compared with natural gas,even with a carbon price of EUR 230/tCO2.By 2050,the fleet of 60 GW gas/H2-ready power plants,primarily operating as peaker plants,will rely on natural gas for about three-quarters of their energy input.By 2050,a fifth of German households will still u

29、se natural gas for heating due to slow retrofitting rates,household financing constraints,and delays in electrical and heat network upgrades.The hydrogen core network will enable H2 uptake and serve dispersed industries,requiring a closed loop.High utilization will take time,necessitating careful gr

30、id expansion planning.From 2035,local hydrogen will compete with imports as cleaner grid power enables high electrolyser use.Capacity is expected to reach 3 GW by 2030,below the 10 GW target,and 18 GW by 2050.By 2050,Germany will import 58%of its 7.3 Mt hydrogen demand,with 35%supplied via pipelines

31、 from Norway,the Baltic Sea region,and Spain.Germany will not achieve climate neutrality by 2045,but energy-related CO2 emissions are set to decline sharply over the next two decades.Despite challenges such as a delayed renewable ramp-up and continued reliance on natural gas,Germanys energy transiti

32、on will accelerate,positioning it as a clean energy hub in Europe.Carbon intensity will decrease dramatically from 2030 onwards,reaching 8 gCO2/MJ by 2050,85%lower than current levels and significantly below the European average.Average annual CO2 emissions per person will drop from 7.3 tCO2 today t

33、o 0.7 tCO2 by 2050.Carbon capture and storage(CCS)will play a crucial role in achieving these goals,with Germany set to capture 36 MtCO2 annually by 2050,covering 43%of remaining energy-related emissions by then.CCS in cement production will see 18 MtCO2 captured in 2050,while bioenergy with CCS(BEC

34、CS)will account for 13 MtCO2 by then.Direct air capture(DAC)will contribute 4 MtCO2 annually by 2050,though large-scale deployment will not occur until the 2040s due to high costs.CO2 will mainly be stored in the North Sea,with short-term reliance on neighbouring countries like Denmark,the Netherlan

35、ds,and Norway for storage.Natural gas and hydrogen will co-exist by 2050,with similar demand levels and one-third of the hydrogen produced domesticallyCO2 emissions will fall by 89%by 2045 and by 95%by 2050 compared with 1990.This means that the 2045 climate neutrality target will not be achieved6DN

36、V Energy Transition Outlook Germany 2025HYDROGEN&CCS COMPETITIVENESSELECTRIFICATIONINVESTMENTSEMISSIONSENERGY DEMANDENERGY SUPPLYPOLICY Between 2025 and 2050,Germanys energy transition requires a cumulative EUR 3.3 trn in investments,with CAPEX allocated as follows:Market-exposed assets(EUR 890 bn)s

37、uch as renewables,hydrogen,and storage;Regulated assets(EUR 700 bn),i.e.electricity transmission and gas/hydrogen networks;End-user fixed assets(EUR 1.7 trn)i.e.upgrading buildings to better efficiency standards,installing new heating equipment,rooftop solar PV,behind-the-meter storage etc.Typically

38、 financed by households via subsidies and loans.Investment in hydrogen and CCS will total nearly EUR 900bn,requiring government support for early projects and long-term contracts.By the 2040s,capital investment in energy as a share of GDP will fall to below 2%(resembling the period 2000-2020).Key ch

39、allenges include mitigating risks,securing long-term contracts,and aligning capital flows with decarbonization objectives.Policies conducive to financing the energy transition include long-term stable regulations,targeted subsidies,and efficient de-risking measures to facilitate investment in the en

40、ergy transition.Energy-intensive industries such as chemicals,metals,paper,and cement,which account for 71%of manufacturing energy consumption,are most vulnerable to high energy prices.Energy-intensive industries currently account for about one fifth of manufacturing value added.In the short term,en

41、ergy-intensive industries will benefit from falling electricity and natural gas prices,following recent historic highs.Although renewable energy will not result in cheap electricity due to increased grid investments and necessary capacity charges,industries reliant on electricity will not face signi

42、ficant price hikes either.Power prices in Germany are likely to settle at or around the European average for most of our forecast period moderately higher than in the US and China.While energy prices will influence industry compet-itiveness,factors like technological innovation and global market dyn

43、amics are more significant drivers.Carbon pricing,shrinking gas network customer bases,and rising fossil fuel supply costs will substantially impact industries reliant on fossil fuels over the next 25 years.Energy-intensive sectors must adapt their business models by prioritising energy efficiency,e

44、lectrifi-cation,and CCS to maintain competitiveness.EUR 3.3 trillion will be invested in energy infrastructure in the next 25 yearsEnergy prices from an increasingly renewables-dominated system will not disadvantage German industry,but,as elsewhere,fossil fuel-heavy industries will need to adapt the

45、ir production processes to decarbonize 7DNV Energy Transition Outlook Germany 2025HYDROGEN&CCS COMPETITIVENESSELECTRIFICATIONINVESTMENTSEMISSIONSENERGY DEMANDENERGY SUPPLYPOLICY1.1 About this OutlookModelling philosophy:Best-estimate approachUnlike most energy forecasters,DNV does not develop multip

46、le scenarios.Instead,we offer a single best-estimate forecast,capturing the most likely trajectory of energy systems based on expected policy developments,technological progress,and associated costs.While uncertainties and sensitivities are discussed,this method avoids presenting equally probable ye

47、t unrealistic futures,focusing instead on actionable insights.The ETO Model frameworkThe ETO Model is a system dynamics tool designed to simulate global energy transitions from 1980 to 2050.Built on principles of interconnectedness,inertia,and non-linearity,the model integrates:Final energy demand a

48、cross sectors(buildings,manufacturing,transport,etc.)Energy supply(coal,gas,oil,bioenergy,and renewables)Transformation processes(electricity generation,refining,hydrogen production)Economic and policy variables(e.g.carbon pricing,trade dynamics)System dynamics principles ensure that all components

49、interact through feedback loops and accumulations,reflecting real-world complexities such as delays in policy impacts,infrastructure deployment,and behavioural adoption.Tailoring the model for GermanyTo ensure the Germany ETO reflects the countrys unique energy system,we populate the model with Cont

50、inued development of proven technology,not uncertain breakthroughsMain policy trends included;caution on untested commitments,e.g.NDCs,etc.Behavioural changes:some assumptions made,e.g.linked to a changing environmentOur best estimate,not the future we wantA single forecast,not scenariosLong term dy

51、namics,not short-term imbalancesLong term dynamics,not short-term imbalancesContinued development of proven technology,not uncertain breakthroughsMain policy trends included;caution on untested commitments,e.g.NDCs,etc.Behavioural changes:some assumptions made,e.g.linked to a changing environmentINT

52、RODUCTION This report,the Energy Transition Outlook Germany 2025,presents a comprehensive forecast of Germanys energy system up to 2050.The analysis builds on DNVs global Energy Transition Outlook 2024(ETO),leveraging the same dynamic simulation framework to capture the complex interactions shaping

53、the global and regional energy landscape.Germany is modelled as a standalone country,informed by the results of the global ETO Model.8DNV Energy Transition Outlook Germany 2025HYDROGEN&CCS COMPETITIVENESSELECTRIFICATIONINVESTMENTSEMISSIONSENERGY DEMANDENERGY SUPPLYPOLICYlocal data and insights,lever

54、aging Germany-specific statistics,policies,and expert knowledge.This includes sourcing detailed input data on GDP,population,industrial output,transport trends,and energy use from authoritative German and EU databases,such as Destatis,AG Energiebilanzen,and Eurostat.The model incorporates Germanys p

55、olicy landscape,including its Energiewende framework,emissions reduction targets,and renewable energy goals.Rigorous quality assurance is applied to validate the data,ensuring consistency with Germanys economic,social,and environmental context.Cross-referencing with reports from institutions like th

56、e Federal Ministry for Economic Affairs and Climate Action(BMWK)and the Fraunhofer Institute enhances reliability.By aligning the model with Germanys local conditions,we create a robust,transparent framework capable of delivering actionable insights for decision-making.Modelling energy demand:Sector

57、al dynamicsThe model estimates energy demand in two steps:Energy services:Forecasting outputs such as passenger-kilometres in transport,heating requirements in buildings,and industrial production volumes.Final energy demand:Applying parameters for energy efficiency and fuel mix to determine energy c

58、onsumption by sector and carrier.Transport:In road transport,Germanys transition to electric vehicles(EVs)is modelled with a multinomial probit approach,incorporating factors like cost,charging infrastructure,and policy incentives.POPULATIONGDP PER PERSON Source ofdemand TRANSPORTBUILDINGSSpace heat

59、ing&cooling,water heating,cooking,and appliances&lightingMeasured in tonne-miles,passenger-kilometres,and vehicles MANUFACTURINGProduction output measured as Manufacturing Value AddedOTHER Road Maritime Aviation RailPipelines Residential Commercial Manufactured goods Base materials Iron and steel Co

60、nstruction and mining FeedstockTRANSPORTFinal energydemand BUILDINGSMANUFACTURINGNON-ENERGYENERGY SECTORSOWN USE POWER GENERATIONHYDROGENOIL REFINERIES Electricity Direct heatEnergytransformation Solar Wind Hydropower Nuclear Bioenergy GeothermalCrude oil Natural gas CoalPrimaryenergy supply FOSSIL

61、FUEL EXTRACTION ENERGY EFFICIENCYDIRECT USEPOLICY9DNV Energy Transition Outlook Germany 2025HYDROGEN&CCS COMPETITIVENESSELECTRIFICATIONINVESTMENTSEMISSIONSENERGY DEMANDENERGY SUPPLYPOLICYMaritime and rail energy demand reflect trade flows and infrastructure development,while aviation incor-porates l

62、ong-term behavioural shifts,policy changes,and technology improvements.Buildings:Energy demand is modelled across residential and commercial sectors,considering factors like building insulation,heating systems,and appliance efficiency.Manufacturing:The model captures Germanys industrial strengths,fo

63、cusing on energy-intensive sectors like steel,chemicals,and cement.Regional variations in technology adoption and energy carrier shifts(e.g.electrification,hydrogen)are incorporated.Energy transformations and carriersThe model includes 12 energy carriers,such as coal,oil,gas,electricity,and hydrogen

64、.Transformation processes like power generation are simulated with a focus on cost,dispatch order,and grid stability.For hydrogen,production methods such as electrolysis and fossil fuel-based pathways are evaluated based on levelized costs.Power generation:Germanys electricity mix is projected using

65、 an hourly dispatch algorithm,prior-itizing renewables while ensuring system reliability through storage and backup generation.Investment decisions are guided by expected market conditions,policy incentives,and carbon pricing.The model uses fixed deterministic hourly patterns for electricity load se

66、gments and for renewable energy generation.The ETO Model operates at the aggregate level and does not have any grid constraints.Hydrogen:The model examines the role of hydrogen in Germanys energy transition,including the devel-opment of green hydrogen from renewables and its use in hard-to-abate sec

67、tors.Trade and integrationGermanys reliance on energy imports,particularly for natural gas and oil,is modelled dynamically based on production,trade costs,and geo-political factors.Hydrogen and ammonia trade flows are projected as part of Germanys shift toward low-carbon energy carriers,with conside

68、rations for infrastructure development and global supply chains.Limitations and uncertaintiesForecasting at a country level introduces greater sensitivity to assumptions such as policy changes and external market conditions.While the Germany ETO incorporates these factors,deviations in global energy

69、 markets,technological breakthroughs,or policy shifts could influence results.Key assumptions underpinning the forecast are outlined in the next section.Reporting conventionsAll monetary values in this report are presented in real 2024 euros(EUR)unless stated otherwise,with underlying calculations p

70、erformed in US dollars(USD)for consistency and later converted using the average exchange rate for the corresponding year or 2024 for the future values.Energy data include those from international aviation and maritime allocated to Germany,which deviates from common conventions that exclude these se

71、ctors.All projections are aligned with the base year 2024 to ensure comparability,and assumptions reflect Germanys specific economic and policy context.The latest available data year varies as indicated on the graphs.Whenever 2024 data is unavailable,references to 2024 values are based on estimates.

72、10DNV Energy Transition Outlook Germany 2025HYDROGEN&CCS COMPETITIVENESSELECTRIFICATIONINVESTMENTSEMISSIONSENERGY DEMANDENERGY SUPPLYPOLICY1.2 General assumptions The ETO Model incorporates key assump-tions in the areas of population,economic development,technology development,and policy to forecast

73、 Germanys energy future.These assumptions are derived from authoritative sources and enhanced with DNVs expertise to ensure accuracy and relevance.PopulationThe population forecast for Germany is based on the Federal Institute for Research on Building,Urban Affairs,and Spatial Development(BBSR)proje

74、ctions.According to BBSRs latest prognosis,Germanys population is expected to remain constant around its current level of approximately 85 million.The average household size is projected to fall from 1.95 today to 1.85 in 2050.The demographic structure shows an ageing population,with implications fo

75、r labour markets,productivity,and energy demand.Population and household-size dynamics are incor-porated into the model to reflect their long-term influence on energy consumption patterns.Economic developmentEconomic growth,measured as GDP per capita,is a major driver of energy consumption.Near-term

76、 GDP and productivity projections are derived from the International Monetary Funds World Economic Outlook(IMF,2024),while long-term forecasts are aligned with the OECDs Long-Term Economic Projections(OECD,2023).The compound annual growth rate(CAGR)for Germanys GDP is projected to be 1.0%,which is s

77、lightly below the historical average of 1.1%from 2000 to now.Economic assumptions also account for sectoral shifts in GDP composition,particularly the impact of energy prices on industrial competi-tiveness,resulting in a slight decrease from 37%to 36%in the secondary sectors share of the economy.Tec

78、hnology developmentOur forecasts account for the global nature of technology learning rates,where costs decline with cumulative capacity due to increased experience,efficiencies,and research and development.Technologies such as solar photovoltaic(PV),wind turbines,electrolysers,carbon capture and st

79、orage(CCS)and batteries benefit from significant cost reductions driven by global deployment.However,scaling up local supply chains in Germany is also crucial to achieving these reductions domestically and ensuring timely project execution.This scaling must address challenges such as workforce avail

80、a-bility,infrastructure development,and localization of key components,which we factor into our model as growth-rate limits.At the same time,resource constraints,including critical materials like rare earth elements,and land-use limitations particu-larly for onshore wind and solar installations pose

81、 significant challenges.These opposing factors are considered in our analysis to reflect the complex dynamics shaping technology development in Germanys energy transition.PoliciesWe incorporate policies and targets outlined in EU,German federal,and German states government strategies,provided they a

82、re deemed likely to be implemented.Targets are not taken at face value,especially when lacking concrete policy measures to support them.Our approach also reflects inde-pendent assessments of the current status across economic sectors,leveraging global expertise in the energy sector,technical and com

83、mercial insights,and input from extensive stakeholder engagement.For a more detailed discussion,see Chapter 2.We offer a single best-estimate forecast,capturing the most likely trajectory of energy systems based on expected policy developments,technological progress,and associated costs.11DNV Energy

84、 Transition Outlook Germany 2025HYDROGEN&CCS COMPETITIVENESSELECTRIFICATIONINVESTMENTSEMISSIONSENERGY DEMANDENERGY SUPPLYPOLICY12DNV Energy Transition Outlook Germany 2025HYDROGEN&CCS COMPETITIVENESSELECTRIFICATIONINVESTMENTSEMISSIONSENERGY DEMANDENERGY SUPPLYPOLICY2.1 Status quo and long-standing t

85、ransition motivations Global trends and turbulent times frame Germanys economy and energy transition compared with previous decades.Policymakers face a host of interrelated concerns that need balancing,ranging from energy security,adjustments since the fallout of cheap Russian gas,energy affordabili

86、ty and de -industrialization risks,to fiscal drag and constraints on public spending in part driven by increasing obli-gations towards defence(the NATO target of 2%of GDP in 2024).The sum of concerns makes it difficult to speed up the energy transition although climate action,energy independence,and

87、 renewable energy are mutually reinforcing in the long term.As Europes most populous country(about 83 million inhabitants)and with its large,industrialized economy and high per capita energy consumption,Germany faces the challenge to fully decarbonize its energy consumption without a loss of economi

88、c output.Its export-dependent industry also faces radically changed market conditions given the new geopolitical context and trade tensions.The manu-facturing and base materials industries(including steel and chemicals)still contribute a significant share(27%)to the gross value added(Orth,2023)compa

89、red with other European countries.At the same time,and unlike some neighbouring countries,Germany does not have substantial domestic energy sources or dispatchable electricity generation,such as hydropower.Its energy supply mix was 78%fossil fuel-based in 2023(IEA,2023),and as of 2022,68%of its prim

90、ary energy supply was imported(Figure 2.1),demonstrating a clear dependence on trade partners for energy provision.Restructuring power supply with renewablesTransforming the energy system has been a long-standing policy priority,notably with power as the first sector to restructure supply.Policies h

91、ave been motivated by fossil-fuel import dependence(oil crises in the 1970s),nuclear plant accidents(Chernobyl 1986,Fukushima 2011)and by climate-change protection since the late 1980s.Energy policy has long focused on decarbonization and renewables uptake 2 ENERGY AND CLIMATE POLICY The policy land

92、scape is embedded in multiple challenges and objectives:climate goals,higher energy costs,industrial competitiveness,high historical import dependence and energy security concerns.How German policymakers navigate these challenges to maintain transition progress is of crucial importance to Europes cl

93、imate-neutrality ambition and Clean(Industrial)Deal strategy and future prosperity.There is a daunting task of balancing whole economy decarbonization with competitiveness and a revamp of the industrial base,at a time where public and voters attention to climate action has been backsliding amid othe

94、r more immediate concerns.Our forecast suggests that policies and spending need ramping up to hold the course to climate goals,but these will have significant upsides in terms of security,efficiency,and energy-cost savings.13DNV Energy Transition Outlook Germany 2025HYDROGEN&CCS COMPETITIVENESSELECT

95、RIFICATIONINVESTMENTSEMISSIONSENERGY DEMANDENERGY SUPPLYPOLICY(e.g.first Feed-In Law in 1990 and a red-green coalition already in 1998 envisioning 50%renewable electricity generated by 2050).Policy and support measures to restructure electricity supply have been reformed over time together with Germ

96、an market restructuring,such as the liberalization of the energy market at the beginning of the 2000s.A primary focus of the German energy policy of the last 20 years has been on the expansion of power generation from renewable sources,particularly wind and solar energy,while in parallel phasing out

97、 nuclear energy and embarking on a process to phase-out hard coal and lignite power generation.For the renewable build-out,the north of Germany offers favourable conditions for the utilization of wind energy,while solar energy can be produced country-wide with yields depending on the geographical la

98、titude.As a result,today,wind power especially is mainly located in the northern parts of the country,which calls for significant power line connections from the north to the south and west to transport electricity to load centres.Reducing import dependency Germanys import strategy up to 2022 relied

99、 heavily on Russia as the main sourcing partner for oil(34%)and for more than 50%of both hard coal and natural gas(Labunski,2023).On the natural gas side,the high level of dependency led to massive problems when the supply relationship with Russia could no longer be continued following the Russian i

100、nvasion and war on Ukraine.This resulted in very high energy prices due to a temporary shortage of natural gas,which affected both the electricity and natural gas markets.Within a very short space of time,Germany was forced to develop new supply capacities and build up an LNG import infrastructure.G

101、iven the new circumstances,but also clearly led by the target to decarbonize further,the government under Chancellor Scholz over the past three years has boosted focus on geographical diversifi-cation of fossil supply;on energy savings and the green energy transition with further expansion of renewa

102、ble energy sources;and on seeking to shield households and companies alike through caps on gas,heat,and electricity prices to buffer price spikes and loss of competitiveness.Nonetheless,increasing energy prices contributed to inflationary pressure and national economic security concerns(Labunski,202

103、3),and will remain a key challenge at least in the short term.Finding a balance between advancing the energy transition and maintaining GDP and domestic industrial production will be one of the main policy challenges for any new government in 2025.However,subsequent govern-ments are likely to find t

104、hat the energy transition will not derail German competitiveness,In fact,as we detail in Chapter 7,there is potential upside from the transition.With the decision in Parliament(2011)to transform the power sector to renewables with nuclear power phase-out(achieved in 2023),the planned phase-out of co

105、al by 2038,and the planned conversion of gas-fired power plants to climate-neutral hydrogen in the mid-to-late 2030s,Germany is currently taking a path that relies predominantly on the possibilities of renewable energies and a decarbonized gas supply in the long term.Besides further increasing renew

106、able generation,for power supply and renewable hydrogen production,significant investment in grids and new,green dispatchable generation will be needed.Decarbonizing the economy without a loss of economic output is a challenge for Germany now but should ease with time.TABLE 2.1Objectives for GHG red

107、uction,renewables,and energy efficiencyTime horizon20302040 2045After 2050MeasureGHG emissionsRenewableshare in end-usesRenewableshare in electricityEnergy efficiencyGHG emissionsEnergy efficiencyGHG emissionsGHG emissionsObjective-65%from 199041%80%-26.5%(final)-39%(primary)from 2008-88%from 1990-4

108、5%(final)from 2008-100%from 1990Negative Source:Update of the Integrated National Energy and Climate Plan,August 2024(EC,2024a)14DNV Energy Transition Outlook Germany 2025HYDROGEN&CCS COMPETITIVENESSELECTRIFICATIONINVESTMENTSEMISSIONSENERGY DEMANDENERGY SUPPLYPOLICY2.2 Germanys transition and climat

109、e ambitions The recent ruling(2021)by the Federal Constitutional Court instills longevity in climate protection focus and is a factor adding continuity and adequacy to policies addressing greenhouse gas(GHG)emissions to avert climate crisis.While the Climate Action Plan 2050 was adopted in 2016,the

110、country did not have legally binding long-term targets in place to reduce national emissions.This was finally achieved in 2019 when the Federal Climate Action Act(KSG)was first adopted.However,shortly after its adoption(less than 18 months),the Federal Constitutional Court declared the Act to be par

111、tially unconstitutional on the grounds that it postponed emission reductions until after 2030,which would penalize the younger generation and could lead to drastic consequences,requiring tough restrictions in the future.The Court emphasized that climate protection must be a priority in accordance wi

112、th Article 20a of the German Constitution.As a result,the Act was revised,targets beyond 2030 were added,and the deadline for achieving climate neutrality was brought forward from 2050 to 2045.According to the Federal Constitutional Court,the German government bears a constitutional responsi-bility

113、towards young and future generations for climate protection.The Courts ruling set a precedent for balancing interests and ensuring fair and sustainable development which anchors continuity to climate action.Climate protection is not only an obligation towards nature,but also an ethical imperative to

114、 safeguard the rights and well-being of young people.In view of the long-term consequences of climate change,the state must act with ambition to ensure a livable environment for all and create the basis for a sustainable future.Currently,transition and emission reduction targets,highlighted in Table

115、 2.1,are set out in the Climate Action Act,Energy Efficiency Act,and the recently updated National Energy and Climate Plan,submitted to the EU in August 2024.Pre-liminary steps were also taken in early 2024 towards proposing a long-term strategy for negative emissions(LNe)for the year 2060 to deal w

116、ith residual emissions(BMWK,2024).A periodic review process is in place to assess progress and ensure that the overall climate protection target is not jeopardized.The next review of progress on target achievement will take place in 2026.At the time of writing this report,the status compared to curr

117、ent targets(2030)is as follows according to data from the Federal Environment Agency(UBA):Progress in emissions reduction:At 674 Mt of total GHG emissions in 2023,a reduction of 46%has been achieved compared to 1990 levels.In recent years,the reduction is mainly caused by effects from the COVID-19 p

118、andemic and the energy crisis in 2022.DNVs forecast emissions are analysed in more detail in Section 8.2 of the report.Progress in energy efficiency:Primary energy consumption has fallen significantly since the end of the 2000s.It reduced 25%between 2008 and 2023.Between 2008 and 2022,final energy c

119、onsumption reduced by 9%,while GDP rose 16%in the same period.Progress in renewables:The electricity sector has made a significant contribution to both efficiency progress and emissions reduction.Total electricity consumption reduced from 580 to 525 TWh between 2000 and 2023,and the share of renewab

120、les in the electricity mix increased from around 6%to 52.5%in the same period.The total share of renewable energies(RE)in energy consumption(electricity,heat,and transport)was at 22%in 2023.A periodic review process is in place to assess progress and ensure that the overall climate protection target

121、 is not jeopardized.15DNV Energy Transition Outlook Germany 2025HYDROGEN&CCS COMPETITIVENESSELECTRIFICATIONINVESTMENTSEMISSIONSENERGY DEMANDENERGY SUPPLYPOLICY2.3 The German energy and climate change policy approach The policy landscape shaping the energy system is complex,comprising of multi-level

122、governance with EU,national,regional and,in some instances,city-level policy initiatives.In this report,we focus predominantly on the EU and national-level policy frameworks.As a founding member of the Coal and Steel Community in 1951 and the EU in 1992,Germanys energy and climate goals and policy a

123、re deeply embedded and interlinked with those of the EU.There is a long history of joint EU commitments under the Kyoto Protocol,the Paris Agreement,and common energy,climate,and industrial policies advancing energy security,sustainability,market integration and,most recently,fast-tracking the clean

124、 energy transition and a green industrial agenda,notably the Green Deal Industrial Plan and the Net-Zero Industry Act.Comprehensive EU legislation needs transposition processes in all EU member states with successive regulations.The measures and incentives in play to stimulate German emissions reduc

125、tion and the tran-sition are a mix of regulations,partly supported by EU financing and national co-financing(EC,2023).Key policy framework documents are shown in Figure 2.2.Current national climate-change policy includes a comprehensive set of measures aimed at reducing greenhouse gas emissions,prom

126、oting economic prosperity,and ensuring social equity.The key measures were outlined by the Federal Ministry for Economic Affairs and Climate Action(BMWK)just a few months after the coalition took over following the 2021 federal election.While the Merkel era was characterized by a gradual approach to

127、 climate targets and international cooperation,the new coalition has been focusing on faster and more flexible measures to achieve climate targets with the overarching ambition to transform Germany into a climate-neutral industrial country.Select policy initiatives,targets,and implementation measure

128、s are detailed in Table 2.2,while a high-light on carbon pricing is included in Section 2.4.Technology targets,sector-specific policy strategies and support are also discussed in the demand and supply chapters and respective technology subsec-tions of the report.Renewable electricity policy expected

129、 to stay firm Transforming the energy system will remain a key challenge for policymakers regardless of which parties will form the next coalition.While a new government will likely make policy adjustments,we do not expect a major overhaul of policy advancing renewable power expansion.Important step

130、s have already been taken and agreed by the traffic-light coalition;and despite the coalition break-up(November 2024),many important milestones have been formalized and translated into specific targets and laws.They include,for example,the main objective to increase the share of renewable National c

131、limate protection policy frameworkNational sector-specific plans and strategiesDec 2019Aug 2020Apr 2022Jan 2024Oct 2024Aug 2024Jul 2023Oct 2023Dec 2023Jul 2024Sep 2021Jul 2022Nov 2023Federal Climate Protection Act 2019 commitment to the 55%reduction target by 2030 and climate neutrality by 2050Natio

132、nal Hydrogen StrategyIndustry StrategySystem Stability RoadmapBattery Storage Strategy(key elements)Power Station StrategyUpdate of the Integrated National Energy and Climate Plan(NECP)Carbon Management Strategy(formalized key elements)Act to Reduce and End Coal-Fired Power Generation to achieve coa

133、l phase-out by 2038Easter Package 56 laws and poli-cies to accelerate the expansion of renewablesFit for 55 package to fulfil EU climate targetsApproval of the hydrogen core networkEuropean Climate Law 2021 commit-ment to implement the EU Green Deal and EU-wide climate neutrality by 2050Federal Clim

134、ate Protection Act 2021 reinforced targets:65%GHG reduction by 2030 and climate neutral-ity by 2045Renewable Energy Sources Act 2022 reinforced targets:80%RES share in gross electricity consumption by 2030Energy Efficiency Act 2023 defining targets to reduce primary and final energy consumptionKey l

135、aws,policy,and strategy documents published over the last four yearsFIGURE 2.2Jul 2021Apr 2024Buildings Energy Act and Heat Planning ActSolar Package IInstalled renewable capacity and CO2 emissions in Germany(targets,forecast and historical values)FIGURE 2.31990200520232030204020452 GW18 GW0 GW1.055

136、 Mt598 Mt9 GW90 Mt 61 GW113 GW142 GW66 GW21 GW82 GW177 GW325 GWTarget 400 GWTarget 160 GWTarget 70 GWTarget 0 MtTarget30 GWTarget115 GWTarget 215 GWPolicy targetsETO forecastHistorical valuesSolar PVOnshore windOffshore windCO2 emissions16DNV Energy Transition Outlook Germany 2025HYDROGEN&CCS COMPET

137、ITIVENESSELECTRIFICATIONINVESTMENTSEMISSIONSENERGY DEMANDENERGY SUPPLYPOLICYenergies in gross electricity consumption from around 52%at present to 80%by 2030 as part of the Renewable Energy Sources Act(EEG).This requires a significant increase in electricity generation from renewable sources,from cu

138、rrently just under 240 TWh to between 544 and 600 TWh in 2030.As a result,the expansion of onshore and offshore wind energy and photovoltaics is being driven strongly forward by ambitious targets.Various measures have been put into law to achieve these targets,as highlighted in Table 2.2,and plannin

139、g and authorization procedures have been expedited.Figure 2.3 visualizes these targets compared with the historical developments and our forecast.The transformation of the energy sector also includes the gradual phasing out of fossil fuels.The coal phase-out is advancing:we expect it will be complet

140、ed within the set timeline(lignite generation in the western parts of Germany by 2030 and all other hard-coal and lignite generation by 2038),mainly supported by additional gas-fired capacity.In addition,policies will support fossil gas-fired power plants to be gradually converted to green hydrogen

141、power plants.Recent decarbonization policy outside of the power sector While Germany is prioritizing renewable electricity and green hydrogen,in tandem with energy efficiency measures,attention to the development of a hydrogen economy is receding.Policy instead emphasizes renewable hydrogen use in p

142、riority sectors and for purposes where direct electrification is not possible,such as in manufacturing.The target for installed electrolyser capacity has been raised to 10 GW by 2030.The Federal Network Agency(BNetzA)approved the construction of the country-wide hydrogen core network in October 2024

143、.Europes largest hydrogen network is meant to be operational by 2032,making it an important pillar of a future climate-neutral energy system.After years of reluctance,carbon capture,utilization and storage(CCUS)has gained more support in the last two years;shown most recently by the German Federal M

144、inistry for Economic Affairs and Climate Action(BMWK)announcing(February 2024)key elements in the national Carbon Management Strategy and the draft bill amending the Carbon Dioxide Storage Act.Although amendments and legislation are in draft status and have yet to be adopted,the Strategy suggests th

145、e principles for public support should be:1)emissions that are difficult to avoid(hard-to-abate,emission-intensive industries)2)CCS for gas-fired power plants will be permitted but not financially supported 3)CCS for coal-fired power generation will not be allowed.The updated NECP(EC,2024a)does not

146、specify concrete CO2 injection/storage volumes by 2030,but does point to further Strategy refinement,measures being under examination,and that ramp-up shall be meaningful for 2045 target achievement.17DNV Energy Transition Outlook Germany 2025HYDROGEN&CCS COMPETITIVENESSELECTRIFICATIONINVESTMENTSEMI

147、SSIONSENERGY DEMANDENERGY SUPPLYPOLICYThe international dimension in the German climate-policy approachGermanys policy and support schemes have an inter-national orientation to enable and complement the domestic support schemes and emissions reduction approach.During COP28 negotiations,the German go

148、vernment published its Strategy on Climate Foreign Policy to further international cooperation and action beyond its borders to achieve global climate targets.Partnership types emphasize major GHG emitters,climate justice,and strategic benefits(Bosch,2024).Bilateral and multilateral partnerships in

149、climate,energy,and raw materials have grown in recent years.One example is Germanys involvement in the Just Energy Transition Partnership(JETP)initiative financed together with partners(e.g.other EU countries,Canada,Japan,the UK,and the US)and supporting the energy transitions in Indonesia,Senegal,S

150、outh Africa,and Vietnam.JETP recognizes the inequalities between countries globally and demonstrates the flow of finance from high-to middle-and low-income countries.Other key examples for climate and strategic benefits include cooperation with countries,such as the Canada-Germany Energy Partnership

151、 focusing on hydrogen and raw materials,and Australia,Chile,Colombia and Namibia on green hydrogen production.National policy intentions are targeting the build-out of hydrogen production and infrastructure domestically.Germanys 10 GW target for installed electrolyser capacity is surpassed in the EU

152、 only by Spains 12 GW,though the strategy for hydrogen and derivatives suggests that about 50%to 70%of demand(1.42.7 MtH2/yr by 2030)will need to be covered by imports(ACER,2024).The plan is to import from within and outside Europe.For global sourcing,Germany is pioneering the H2Global mechanism(H2G

153、lobal Stiftung,2024)to obtain renewable hydrogen through tenders and auctions implemented by Hintco,which is to conclude long-term purchase contracts on the supply side and short-term sales contracts on the demand side.While the government has expressed long-term preference for renewable(green)hydro

154、gen,acceptance of other low-carbon(blue)hydrogen imports is likely to ensure a reliable supply that meets short and medium-term demand.However,imports will have to comply with emission thresholds as set in EU Delegated Acts.We expect policy and support schemes to pursue a pragmatic balance between i

155、mports in parallel with expanding domestic renewable production capacity and infrastructure.The policy landscape under a new government With a new government taking over in 2025,the aforementioned targets,also detailed in Table 2.2,will be revisited.The debt brake(Schuldenbremse)a fiscal policy rule

156、 limiting government borrowing contributed to the three-year-old coalition breaking up(Kiderlin,2024)and will also be a point of debate.Currently,Germanys government debt level(gross public debt as a%of GDP)is below that of other major EU countries(EC,2024b)and is argued to be too restrictive and re

157、sults in a lack of public investment and innovation(Sigl-Glckner,2024).Due to the currently slow economic development of key industries,it is likely that any new government will put the affordability of the energy transition at the centre of its planning.At the same time,the government will have to

158、show stability and continuity,especially towards the energy system which relies on long-term investments.We expect a new government,which will most likely be a broad coalition of parties from the democratic centre,to have a self-interest in continuing the overall energy transition.Although changes i

159、n focus and approach are expected,a fundamental policy change is most unlikely.Any new government will have to fulfil the requirements of the Constitution on climate protection,continue the efforts to make Germany less dependent on energy imports,and secure its attractiveness for industry.Therefore,

160、we expect Germany to continue its cross-sectoral transformation and to work in close public-private collaboration towards recalibrating its strategic position as a clean energy hub in the centre of Europe.We expect a pragmatic balance between hydrogen imports in parallel with expanding domestic rene

161、wable production capacity and infrastructure.18DNV Energy Transition Outlook Germany 2025HYDROGEN&CCS COMPETITIVENESSELECTRIFICATIONINVESTMENTSEMISSIONSENERGY DEMANDENERGY SUPPLYPOLICYTABLE 2.2Key targets marked with*if binding in German policy and strategy documents and a non-exhaustive list of imp

162、lementation measures German policy ambitions and targetsExample implementation measuresSupply sideOffshore wind30 GW installed capacity by 2030 and 70 GW by 2045*.Germany signed the North Sea Ostend Declaration to establish 26.4 GW by 2030 and 66 GW by 2045;and 3.8 GW by 2030 in the Marienburg Decla

163、ration,Baltic Sea.Tenders with one-sided contract-for-difference(CfD)scheme to achieve according to targets.Annual tenders 8,0009,000 MW 2023/2024,decreasing gradually to around 4,000 MW from 2027;projects benefit from pre-analysis of wind farm sites by BSH;right to use grid connection to shore free

164、 of charge.Onshore wind115 GW installed onshore wind capacity by 2030 and 160 GW by 2040*.Tenders to achieve according to targets;2%of the countrys land is reserved for wind energy;streamlined permitting.Solar215 GW installed solar photovoltaic(PV)capacity by 2030 and 400 GW by 2040*.Rooftop and gro

165、und-mounted solar PV should contribute equally to this increase in installed capacity.Tenders to achieve according to targets for utility scale(750 kW);tax breaks/exemptions on rooftop solar PV(5,000 gross tonnage)from 2024.Manufac-turingDecarbonization of industrial production processes in line wit

166、h the REPowerEU Plan and the Green Deal Industrial Plan to reduce fossil-fuel dependencies.RED III sets an industry sub-target for RFNBOs to account for 42%of hydrogen use in 2030 and 60%by 2035.Public funding(KTF)with EUR 4 bn(first round of auction scheme)for 15-year,two-way CCfDs as climate prote

167、ction contracts.Eligible projects:60%emission cuts within three years,90%within 15 years.Free allowance removal,EU ETS-1,with CBAM introduction.BuildingsBuildings Energy Act(GEG)stipulates energy-efficiency improvements and renewable energy use.Existing heating networks to be 100%renewable by 2045.T

168、arget of 500,000 heat pump installations per year aiming for a total of 6 mn by 2030.An additional 100,000 buildings to be connected annually to district heating networks.Newly installed heating systems to operate on 65%renew-ables.Mandatory nationwide municipal heat-planning obligations(between 202

169、6 and 2028)for decarbonization.Federal Funding for Efficient Buildings(BEG)e.g.heat pump investment subsidy,gas boiler replacement programme.CO2 pricing on buildings fuel since 2021.FIGURE 2.4Policy factors included in our Outlook3.Zero-emission vehicle support9.Fuel,energy,and carbon taxation12.Met

170、hane intervention6.Energy-efficiency standards 1.Renewable power support7.Bans,phase-out plans,mandates4.Hydrogen support10.Air pollution intervention2.Energy storage support8.Carbon pricing schemes11.Plastic pollution intervention5.CCS,DAC support19DNV Energy Transition Outlook Germany 2025HYDROGEN

171、&CCS COMPETITIVENESSELECTRIFICATIONINVESTMENTSEMISSIONSENERGY DEMANDENERGY SUPPLYPOLICY2.4 Policy factors in ETO Germany Our analysis and input into the ETO Model are informed by the policies set out in Germany.Based on our global energy sector knowledge and our technical and commercial expertise,we

172、 include our own assessments of the state of play in key energy demand sectors of the economy.It is not a given that energy or climate ambi-tions and targets will be met at either national,regional,or global levels.As such,our modelling is not pre-set to achieve Germanys 65%emission reduction target

173、 by 2030 or carbon neutrality by 2045.What matters for DNVs forecast is that policies are both enacted and implemented.In other words,it is target-setting and plans coupled with sector-specific implementation measures and aligned finance that set the direction,scope,and pace of the transition to inf

174、luence the energy mix and emissions trajectory.In our global model,country-level data on expected policy impacts are weighted and aggregated to produce regional figures for inclusion in our calcula-tions.For our country model on Germany,we map existing and indications of planned future policy develo

175、pments to assess their likely impact and derive a model-specific policy factor.DNVs global Energy Transition Outlook 2024(DNV,2024)includes a comprehensive discussion of the policy toolbox and policy factors influencing the global forecast(Figure 2.4).We advise readers to visit this source for a det

176、ailed description of how we account for policy in our forecast.The same policy factors are incorporated in this forecast for Germany.For assumptions on carbon pricing,please refer to the highlight overleaf and Table 2.3.Our modelling is not pre-set to achieve Germanys 65%emission reduction target by

177、 2030 or carbon neutrality by 2045.TABLE 2.3DNV projection of German carbon prices under ETS-1 and ETS-2 trajectoriesCarbon price by year(EUR/tCO2)2024202520262027202820302035204020452050ETS-17580100100120140185200210230ETS-24555656565656510015020020DNV Energy Transition Outlook Germany 2025HYDROGEN

178、&CCS COMPETITIVENESSELECTRIFICATIONINVESTMENTSEMISSIONSENERGY DEMANDENERGY SUPPLYPOLICYHow our forecast accounts for carbon pricing We derive a best estimate of the trends and future price levels in existing and future expected carbon pricing schemes for use in the analysis.Germanys stationary land-

179、based installations(e.g.power gener-ation,manufacturing industry)were responsible for 47%of total GHG emissions in 2022(EC,2023)and covered by the EU emissions trading system(EU ETS-1).The EU ETS-1 price trajectory is expected to recover from its present dip resulting from weak demand from industria

180、l buyers and power sectors,sluggish economic growth,and the oversupply of EU allowances(EUA)between 2023 and 2026 to fund the Recovery and Resilience Fund.A recovery is expected for reasons such as:shipping increasing demand for EUAs(first round of surrendering allowances,September 2025)phasing out

181、of free allowances for aviation(2026)industry decarbonization becoming price-setting by the early 2030s given removal of free allowances in accordance with phase-in of the EUs carbon border adjustment mechanism(CBAM)the carbon emissions cap being destined for zero around 2040 future demand for engin

182、eered removals of carbon is likely to increase.The EU has until 2026 to decide whether to propose rules adding removal credits to the market.If this is pursued,it is likely to entail high environmental standards for international credits,suggesting costlier credits.At the national level,the Fuel Emi

183、ssions Trading Act(BEHG)introduced a national emission trading system(nETS)imposing a carbon price on fuel suppliers in the buildings and transport sectors.It sets a fixed but rising price per tonne of CO2:EUR 25 in 2021,EUR 45 in 2024,and EUR 55 in 2025.The scheme will be phased into auctions in 20

184、26 but with a price corridor at EUR 5565/tCO2.For 2027,a price corridor is yet to be decided(Wettengel,2024;energie-fachberater.de,2023).Germanys frontrunner effort inspired the EU to create the EU ETS-2 for buildings and transport sectors at the EU level,as part of the 2023 revisions of the ETS Dir

185、ective.As in Germany,the obligated entities will be fuel suppliers,and the scheme aims to help Member States achieve emission reduction targets under the Effort Sharing Regulation(ESR).The future EU ETS-2 will be relevant for German emissions within the ESRs scope.For reference,buildings and transpo

186、rt(domestic transport activities,excluding CO2 emissions from aviation)accounted for 30%and 19%respectively of ESR emissions in 2022(EC,2023).Germanys nETS is expected to be transitioned into the EU ETS-2 scheme set to become fully operational in 2027.However,Member States have the option to delay i

187、ntroducing EU ETS-2 until 2031,provided their national carbon price is higher than in the EU ETS-2,which will have a maximum price level of EUR 45/tCO2 in its first three years of operation.Since the German price level in 2027 is expected to be higher,we assume that the national schemes price level

188、will be kept into the early 2030s and then follow the price trajectory for the EU ETS-2,replacing the provisions adopted by Germany at national level.We incorporate the projected carbon price trajectories as seen in Table 2.3.This chapter explores the evolving landscape of energy consumption in Germ

189、any through to 2050.Despite moderate economic growth,total energy demand is expected to decline,driven by efficiency measures and the transition to renewable energy sources.The analysis highlights how key sectorstransport,buildings,and manufacturingare adapting to new energy realities.While transpor

190、t sees a shift towards electrification,the buildings sector continues to improve efficiency through heat pumps and insulation.Manufacturing faces challenges in reducing fossil fuel reliance but benefits from innovation and regulatory support.Overall,Germanys energy transition is set to reshape deman

191、d patterns,with electricity and hydrogen playing pivotal roles in the coming decades.3 ENERGY DEMAND Towards 2050,we forecast a further reduction in energy demand(Figure 3.1)accompanied by moderate economic growth of 1%per year.Using BBSR forecasts(2024),the German population in this analysis is exp

192、ected to stay flat at around 85 million people until 2050.Historically,energy demand has grown in lockstep with population growth and improvements in standards of living.Germany already managed to decouple energy demand from economic growth in the mid-1980s partially based on learnings from the oil

193、crisis and its impact on the German economy.To this end,energy efficiency measures were introduced at an early stage and the expansion of renewable energies was also strongly promoted starting with the first law for renewable feed-in in 1990 and afterwards from the beginning of the 2000s by the intr

194、oduction of a more advanced renewable feed-in law(EEG).For these reasons,German energy demand has been declining since the early 2000s at the latest.A closer analysis reveals that this decline in energy demand is particularly attributable to the buildings and production sectors,while there has been

195、an increase in the transportation sector which can be largely attributed to road traffic.Over the coming 25 years,Germany will electrify slightly faster than the European average.Electricity has a growing share in all sectors,but its growth is greatest in the transport sector,where it will grow from

196、 3%to 48%.21DNV Energy Transition Outlook Germany 2025HYDROGEN&CCS COMPETITIVENESSELECTRIFICATIONINVESTMENTSEMISSIONSENERGY DEMANDENERGY SUPPLYPOLICY(Figure 3.2).Over the coming 25 years,Germany will electrify slightly faster than the European average,which will grow from 21%today to 43%in 2050.Elec

197、tricity has a growing share in all sectors,but its growth is strongest in the transport sector,from 3%to 48%,and weakest in manufacturing,from 31%to 52%in the same period.The specifics of Germanys electrification are elaborated upon in Chapter 5.With a 41%share,oil dominates Germanys energy mix toda

198、y,but will decline to 13%in 2050.In absolute terms,direct use of oil declines more than 80%,due mainly to the electrification of road transport.Direct use of natural gas is reduced by 70%by 2050,and its use in power generation also declines.The aforementioned reduction in energy demand will be possi

199、ble because of the expansion of renewable energies and a more efficient use of energy through electrification,which will enable high efficiency potentials to be tapped.Figure 3.2 highlights this development.The final energy demand shown in this graph represents the energy supplied to customers,inclu

200、ding non-energy-related utilization but excluding the sectors own consumption and energy losses,for example in power plants.Electricitys current 19%share in energy demand in Germany will grow modestly to 23%in 2030.There-after,we expect an acceleration of electrification to drive it to a 36%share by

201、 2040 and 46%by 2050 Hydrogen and its derivatives are negligible as energy carriers today,but will grow to 5%of Germanys energy mix by 2040 and 13%by 2050.In the remaining parts of this chapter,we detail the demand for energy sources in the sectors of transport,buildings,production of goods,and for

202、non-energy-related use to produce feedstsock.We highlight key developments in each sector driving the energy transition.22DNV Energy Transition Outlook Germany 2025HYDROGEN&CCS COMPETITIVENESSELECTRIFICATIONINVESTMENTSEMISSIONSENERGY DEMANDENERGY SUPPLYPOLICYThe transport sector accounts for 29%of f

203、inal energy demand in Germany,93%of which is fossil-based.This demand was slowly increasing until 2020,when the COVID-19 pandemic led to a significant decline,particularly in aviation.The subsequent energy price crisis caused by the war in Ukraine also reduced transport demand in 2022.Going forward,

204、electrification of the road sector,increased aviation tax,and efficiency gains throughout will see the sectors energy demand halve between now and mid-century.3.1 TRANSPORT ENERGY DEMAND has a negligible share of 2%to 3%in the transport energy mix today(Figure 3.3),mainly for rail.This share will ri

205、se to 48%by 2050,overtaking oil as the sectors main energy carrier.This revolution Decarbonizing transport is a considerable national challenge.The sector accounts for two-thirds of the countrys oil demand today.Hence,it is a key contributor to the countrys GHG emissions.Electricity 23DNV Energy Tra

206、nsition Outlook Germany 2025HYDROGEN&CCS COMPETITIVENESSELECTRIFICATIONINVESTMENTSEMISSIONSENERGY DEMANDENERGY SUPPLYPOLICYperiod.Put differently,two-thirds of the 52%increase in electricity demand comes from transport.This will require a massive investment in renewables and the power grid,as discus

207、sed in Section 4.1 and 8.1.Electric vehicles not only draw electricity from the grid,but can also serve as electricity storage and stabilize the grid via vehicle-to-grid(V2G).As the electricity mix will contain increasingly more variable renewables,as described in Section 4.1,the batteries of the el

208、ectric vehicles connected to the grid could serve as a reserve to supply electricity when the sun is not shining and the wind is not blowing.Assuming that 7%of EVs are available for V2G,they will contribute 24%or more of the energy storage in fuel mix within transport contributes significantly to th

209、e decrease in final energy demand through efficiency gains.It also improves Germanys energy self-sufficiency.Impact of transport electrification on the power sectorWhile electrification of transport reduces the sectors overall energy demand and GHG emissions,it signif-icantly increases electricity d

210、emand,thereby putting pressure on the power grids capacity.Transports electricity demand will increase 10-fold from 68 PJ/yr in 2024 to 670 PJ/yr in 2050.For comparison,Germanys total electricity demand is expected to increase from 1,730 PJ/yr to 2,640 PJ/yr over the same capacity from 2035 onwards,

211、making 378 GWh of storage available by 2050.RoadRoad transport,and passenger transport in particular,is the dominant energy consumer amongst the transport subsectors(Figure 3.4).Therefore,it is also one of the key sectors to decarbonize.As the automotive industry is also one of the core industries i

212、n Germany,the transformation of transport is particularly important in climate and industrial policy.The German government has defined various targets for the mobility transition.In 2010,the goal was 1 million EVs for passenger transport by 2020(Bundesregierung,2009).Although this target was missed,

213、the current legislature set an even more ambitious goal of 15 million passenger EVs by 2030(Wettengel,2024).By the end of 2024,around 2.1 million pure EVs were registered,out of 48 million passenger vehicles.By 2030,we forecast about 12 million pure EVs and an additional 2 million plug-in hybrids.In

214、 2036,EVs will be the most-owned passenger vehicle(Figure 3.5).For comparison,parity will not occur until 2040 for commercial vehicles.The EU has complementary goals for sales of new passenger and light commercial vehicles,requiring the new fleet to produce zero CO2 emissions in 2035(European Parlia

215、ment and EU Council,2023c).EVs 24DNV Energy Transition Outlook Germany 2025HYDROGEN&CCS COMPETITIVENESSELECTRIFICATIONINVESTMENTSEMISSIONSENERGY DEMANDENERGY SUPPLYPOLICYKBA),the lack of supply,particularly for small and mid-size cars from German car manufacturers,has so far led to a more modest inc

216、rease in sales than in other countries.Regarding usability,there is still a certain scepticism towards electric mobility,expressed through consumers range and charging anxieties.Additionally,the positive features of EVs are still not fully understood by the consumers.These benefits include that the

217、operation of an EV(i.e.tank-to-wheel)is three to four times more efficient than an internal combustion engine vehicle(ICEV)and that EVs require less costly maintenance due to fewer and less complex components.Many of these inhibitors will be overcome in the years to come.EVs will become more afforda

218、ble with the learning curve on batteries,as discussed in the fact box on the next page.German manufac-turers will launch many new EV models in the mass market segments mentioned above.Additionally,the usability will improve with improved battery tech-nology combined with the expansion of the chargin

219、g infrastructure,particularly the fast-charging systems along the motorway network.Here,regulations such as the Fast-Charging Act(SchnellLG),passed in 2021,are having a positive effect.As a result,fast charging has become a de facto equal to normal tank stops,meaning that EVs have reached comparable

220、 usability to ICEVs for an increasing number of people.These factors will contribute to boosting the ramp-up of electric vehicles.The commercial market is lagging the passenger transport market(Figure 3.6).The main reason,accounted for only 15%of new registrations at the end of 2024(ADAC based on KB

221、A,2024).In 2035,we forecast that the EU goal will be almost met,with EVs reaching a 94%market share(Figure 3.6).The latest Renewable Energy Directive(RED III)from 2023 further increases the requirements on the use of renewable energies in transport and the reduction of GHG emissions from fuels.The R

222、ED III provisions for transport are implemented via the Federal Emission Control Act(BImSchG),in which the GHG reduction quota obliges the mineral oil industry to reduce CO2 emissions of its fuels through the use of renewable energies.A high share of EVs positively impacts this quota because the CO2

223、 emissions saved by EVs can be sold as emission certificates,therefore supporting Germany in complying with RED III.To reach the desired EV ramp-up,the government has planned an expansion of charging infrastructure,with a goal of 1 million public charging points by 2030.As of December 2024,there wer

224、e around 154,000 public charging points(BNA,2024).Achieving the goal will require significant effort from multiple stakeholders.However,it may be asked whether 1 million charging points will be needed,as fast-charging points are becoming more common,reducing the time required per charge.Multiple fac

225、tors contribute to the particularly slow EV ramp-up in Germany.Some are economic,such as the end of subsidies for EVs since the end of 2024 and the fear of potentially lower vehicle residual values.Since Germans also tend to drive German cars(around 63%of the entire fleet according to on the technic

226、al side,is that commercial transport requires a larger battery capacity,without letting the high battery weight reduce the payload too much.In addition,significantly more powerful charging points(Megawatt Charging System)are required to enable acceptable charging times,which requires large investmen

227、ts in the power grid and charging infra-structure.Another reason for a delayed uptake in this segment is that companies are reluctant to invest in a vehicle technology whose long-term viability and service life have yet to be proven.Nevertheless,in the long run,the commercial vehicle sector will als

228、o be EV-dominated,at least for short and medi-um-haul transport.In long-haul transport,hydrogen is considered a possible decarbonization alternative(discussed further in Section 4.2).Consequently,5%of commercial vehicles will be fuel-cell EVs in 2050.The total number of vehicles in Germany has been

229、increasing steadily to its current level of about 52 million but is not expected to change much by 2050(Figure 3.5).The number of passenger vehicles will remain almost the same at 48 million from 2020 to 2050,due not to less transport of people but to more car sharing,automation,and better public tr

230、ansport,reducing the need for a private car.The number of commercial vehicles,on the other hand,will continue to rise,from 4 to 5.5 million.By the end of 2024,around 2.1 million pure EVs were registered,out of 48 million passenger vehicles.By 2030,we forecast about 12 million pure EVs and an additio

231、nal 2 million plug-in hybrids.25DNV Energy Transition Outlook Germany 2025HYDROGEN&CCS COMPETITIVENESSELECTRIFICATIONINVESTMENTSEMISSIONSENERGY DEMANDENERGY SUPPLYPOLICYSeveral trends are speeding up the transition away from ICEVs.Therefore,even though the market share of EV sales was quite low in G

232、ermany in 2024,this will most likely change soon.The key driver will be the total cost of ownership(TCO)for EVs compared to ICEVs(Figure 3.7),but usability also plays a role.The initial cost is the purchase cost,which is higher for EVs than ICEVs in general.However,EV prices are falling globally,dri

233、ven mainly by Chinese and US manufacturers who have successfully scaled the technology.With a ramp-up of production capacities for EVs,large-scale effects are associated as EVs in general have fewer parts,making the production process simpler than for ICEVs.The battery system is a major reason why E

234、Vs are more expensive than ICEVs,making up about 30%of the cost of a new EV today(Carlier,2023).This share is rapidly decreasing due to additional large-scale effects,since the battery cells are used for multiple applications.The price per battery capacity today is a sixth of what it was in 2014(Cat

235、saros,2024)and it is expected to be almost halved again by 2030(Goldman Sachs,2024).To improve the usability of EVs,the reduced battery costs will partly lead to increased battery size and EV range(Figure 3.7),instead of only reducing the purchase cost.The second cost is that of utilization.EVs cost

236、 less to operate than their ICEV alternatives.Per kilometre,the cost of electricity is less than that of diesel and gasoline.The difference will probably increase in favour of EVs over the coming years,due to rising CO2 prices.Additionally,the service costs of EVs are less than those of ICEVs.In sho

237、rt,TCO parity between EVs and ICEVs will soon be upon us.The growing EV market share has drastic implications for the car industry.Maintaining the development of two alternative drivetrain concepts will be too costly for mass manufacturers who are in competition with companies specializing in the el

238、ectric drivetrain.This competition will likely enforce the drivetrain shift over the coming years.As ICEVs are replaced as the dominant vehicle,their usability will also decrease because,for example,petrol stations will become scarcer,making EVs an even better choice.The planned bans on combustion e

239、ngines might point this in the right direction and can assist the transition but are not likely to drive it.Deep-dive:economies of electric vehiclesEVs cost less to operate than their ICEV alternatives.Per kilometre,the cost of electricity is less than that of diesel and gasoline.26DNV Energy Transi

240、tion Outlook Germany 2025HYDROGEN&CCS COMPETITIVENESSELECTRIFICATIONINVESTMENTSEMISSIONSENERGY DEMANDENERGY SUPPLYPOLICYMaritimeThe maritime sector will also see a revolutionary change in its fuel mix(Figure 3.4),reducing its fossil share from 99%in 2024 to 42%in 2050.Some fossil-fuelled ships will

241、likely include onboard carbon capture and storage(CCS)to reduce GHG emissions even further.The alternative fuels include electricity,ammonia,biofuels and electrofuels like e-methanol.In the 2040s,some shipping will also be driven by nuclear propulsion,with the benefit of not having to refuel.Electri

242、fication in port and the transition to more expensive carbon-neutral fuel alternatives will improve energy efficiency and reduce emissions.In summation,total German energy demand for maritime transport will fall by more than a third(36%)between 2024 and 2050,even though the total tonne-miles will gr

243、ow with the increased GDP over the same period.Similar to aviation,maritime is difficult to electrify.The fuel mix transition will again be driven by policy rather than market forces.The EUs FuelEU Maritime regulation stipulates a gradual 80%reduction of CO2-equivalent emissions between 2020 and 205

244、0 for ships within its scope(EC,2023;European Parliament and EU Council,2023a).Additionally,the International Maritime Organizations(IMO)ambition,increased in 2024,is for shipping to become climate-neutral by or around 2050(IMO,2023).While the regulations are more ambitious than for aviation,maritim

245、e is more complex and harder to control.The economic element of the IMOs strategy and the need for new industry to produce alternative,lower-carbon fuels for ships,are likely to prevent these goals being fully met.AviationAviation saw a significant decrease in passengers and energy demand worldwide

246、due to COVID-19.In Germany,the number of passengers is still not back to 2019 levels.One reason is that more business meetings are conducted online.Moreover,the uptake of domestic air travel is slower compared to other European countries.The number of seats in 2024 was just 50%of the 2019 level(Air

247、Service One,2024).This could be linked to increases in aviation tax in 2020 and 2024,reducing the profitability of budget airlines,who in turn have left the domestic market to Lufthansa.This also makes high-speed trains or cars a tempting alternative for domestic travellers.Aviations fuel mix will u

248、ndergo a revolution by 2050,with fossil fuels share decreasing from 98%in 2024(2%biofuel)to 40%in 2050(Figure 3.4).However,whereas road transport can easily be electrified,aviation must in most cases rely on more compact energy sources,such as hydrogen,biofuels,and other e-fuels.Sustainable aviation

249、 fuels(SAFs)are in general more expensive than the established fossil alternatives.Hence,this shift is not driven by market forces,but by policy.In particular,the ReFuelEU regulation includes a gradual increase in SAFs share of fuel supplied in EU airports from 2%in 2025 to 70%in 2050(European Parli

250、ament and EU Council,2023b).The build-out of the new SAF supply industry,required to meet these goals,is likely to be a bottleneck,preventing these goals from being fully met.RailTransport by rail is more energy efficient than by road,both for passengers and freight.Therefore,Germany aims to transit

251、ion its transport from road to rail.To achieve this goal,it is planning“the biggest reform of the railways since 30 years ago”to strengthen its rail network(DG COMM,2024).While the share of rail in freight transport grew by 3 percentage points over the past 20 years to 20%in 2022,it should reach 25%

252、by 2030,according to the government.Additionally,more high-speed inter-city train lines will be built,as well as further supporting local public transport(DG COMM,2024).Where short-haul air travel experienced increased taxation in 2020,long-distance passenger rail journeys got a reduction from 19%to

253、 7%in value added tax,incen-tivizing travellers to take the train.Note that,in this report,rail transport includes all rail-based transport,from local trams and underground trains to national and international railways.To ensure sustainable growth of rail transport,a greater share of the rail networ

254、k needs to be electrified while its overall resilience needs strengthening to avoid conflicts between passenger and freight transport.Rail-based transport is easier to electrify than the aviation and maritime sectors,as it can usually be powered by overhead wires or similar.Just over 60%of the Germa

255、n rail network is electrified today,with the percentage share varying by federal state(BMDV,2021).Nevertheless,with the most-used railways having been electrified first,electricity already meets 81%of the sectors final energy demand,with fossil energy accounting for most of the rest.Going forward,Ge

256、rmany aims to electrify 75%of its 33,000-kilometre railway network by 2030.Additionally,Deutsche Bahn(DB)aims to be fully climate-neutral by 2038,including both the substitution of all diesel locomotives and using only green electricity(DB,2023).To almost achieve this by the early 2040s,we foresee t

257、hat some hard-to-electrify trains will run on hydrogen.27DNV Energy Transition Outlook Germany 2025HYDROGEN&CCS COMPETITIVENESSELECTRIFICATIONINVESTMENTSEMISSIONSENERGY DEMANDENERGY SUPPLYPOLICYThe buildings sector accounts for more than a third(35%)of total energy demand in Germany today.Fossil fue

258、ls account for the majority of energy use,with only 29%of demand currently covered by electricity.We forecast that use of natural gas and oil will decline,but are not eliminated from the energy mix in 2050.Increasing electrification,especially through heat pumps in space heating,along with the assoc

259、iated energy-efficiency gains,will cause overall energy demand in this sector to decline slightly by mid-century.With approximately 20 million residential buildings in 2022,a significant reduction of energy demand in the building sector can only be achieved over a longer period of time.While DNV for

260、ecasts that this sector will continue to rely on natural gas,we expect substantial decarbonization in every segment mainly driven by electrification.3.2 BUILDINGS ENERGY DEMAND increased energy-efficient modernization of buildings,and the expansion of decentralized renewable heating systems supporte

261、d by federal subsidy schemes such as the efficient building subsidy(BEG)and the efficient heating network subsidy(BEW).Large-scale heat pumps and long-term seasonal heat storage have been identified as key technologies to further decarbonize district heating.Moreover,50%of distributed heat is to be

262、produced on a climate-neutral basis by 2030(BMWK,2022a).The German Building Energy Act(GEG)was amended to set the buildings sector(new buildings and renovations)on track towards the carbon-neutrality goal.As an example,from 2026 every heating system in new buildings is to be operated The buildings s

263、ector represents a significant energy demand in Germany.The German Environment Agency(UBA)estimates that one-third of primary energy consumption in Germany was used for space heating in buildings in 2021(UBA,2024).Reducing energy demand must be realized through renovation when it comes to the existi

264、ng building stock.In new buildings,legally prescribed standards for maximum energy consumption must be observed to ensure energy-efficient designs.Germanys National Energy and Climate Plan(NECP)highlights its 2023 Climate Action Programme and policies to surpass EU targets by achieving GHG neutralit

265、y by 2045(EC,2024).Carbon-neutrality ambitions include the decarboni-zation and expansion of district heating networks,the 28DNV Energy Transition Outlook Germany 2025HYDROGEN&CCS COMPETITIVENESSELECTRIFICATIONINVESTMENTSEMISSIONSENERGY DEMANDENERGY SUPPLYPOLICYminimum standards for insulation,solar

266、 protection,airtightness of buildings,and more.Today,annual buildings energy demand is 3,200 PJ.By 2050 this will have declined 38%to 2,000 PJ (Figure 3.8).This is due to the efficiency improvements in buildings,including the electrification of space and water heating,and improvements in building in

267、sulation.Although Germany already has a moderate share of electricity in the overall buildings mix,at 29%(910 PJ),by 2050 we forecast the sector becoming primarily electricity in 2050 at 51%(1,000 PJ).In 2024,natural gas was the sectors main energy carrier at 1,200 PJ.This will decrease to 330 PJ on

268、 at least 65%renewable energy (Gebudeenergiegesetz GEG,2022).To help homeowners decide on a suitable heating system,the new Heat Planning Act(WPG)requires munici-palities and cities with populations of 100,000 and greater to create a climate-friendly heating plan by June 2026,while smaller regions h

269、ave a June 2028 deadline(WPG,2023).As a result of this Act,municipalities will define heat supply areas,outlining which developments regarding the expansion of district heating or the decommissioning of gas distribution grids are planned in the respective areas,guiding and supporting homeowners in u

270、pcoming investment decisions.Besides restricting fossil-based heating systems,the GEG also defines in 2050,or one-sixth(17%)of the sector energy mix.This forecast indicates that the sector will consume natural gas with greater efficiency by using condensing boilers.District heating and biomass will

271、have fewer substantial shares in energy demand.Oil will be negligible contributors by mid-century.Although hydrogen is specifically listed as one potential energy carrier in the GEG,we do not foresee major use of it in buildings.By 2050,the share of hydrogen in this sector will be just above 1%,as i

272、t is in general not an economically viable option compared to the alternatives.Further details on future hydrogen demand and our forecast on the future development of its prices are discussed in Section 4.2.The forecast divides energy consumption activities in the buildings sector into five broad en

273、d uses:space heating,water heating,cooking,space cooling,and appliances and lighting including data centres(Figure 3.9).Space heating As of 2024,about three-quarters on the heating systems in Germany are oil or gas boilers.DNV forecasts an expansion of efficient technologies like heat pumps graduall

274、y increasing over the coming years,driven by policy and pricing incentives.From 2026,there is a federal mandate that every heating system in new buildings is to be operated on at least 65%renewable energy,and that 50%of buildings 29DNV Energy Transition Outlook Germany 2025HYDROGEN&CCS COMPETITIVENE

275、SSELECTRIFICATIONINVESTMENTSEMISSIONSENERGY DEMANDENERGY SUPPLYPOLICYrising from heating just 5%of households today to nearly a third(32%),around 15 million households(Figure 3.10).As a result,natural gas share of the space heating final energy mix drops from nearly half(46%)in 2024 to 31%in 2050.A

276、third of this gas will be supplied from low-carbon biomethane.One barrier to adopting renewables and low-carbon heating systems is the split incentive problem where the costs of investing in energy efficiency are borne by landlords,while it is the tenants who see the benefits in form of lower energy

277、 costs.To overcome this barrier,the CO2 Cost Share Act(CO2KostAufG)was passed to fairly split the cost of heating-related CO2 between landlords and tenants.For example,in buildings in the lowest energy-efficiency category and with central heating,the landlord must pay 90%of the CO2 costs.In the high

278、est energy-efficiency category,the tenant covers all costs.This incentivizes landlords to substitute fossil-based heating systems in old buildings;otherwise,they will have to bear the majority of CO2 costs as the tenant cannot simply switch the energy carrier for heating(Reuter et al.,2023).Addition

279、ally,the German civil code allows for landlords to charge a modernization levy to partly recoup the costs of energy renovations(EC,2020).Incentives such as the 30%subsidy(up to 70%for heat pumps)for renewable-based heating systems through the Federal Support for Efficient Buildings(BEG)will be essen

280、tial in decarbonizing residential and commercial buildings(BAFA,2024).Federal tax on CO2 emissions EUR 45 per tonne in 2024 heating should come from climate-neutral sources by 2030(Bundesregierung,2024;BMWK,2022a).The 1,600 PJ of energy for space heating in 2024,the largest end use(50%of the total)i

281、n the sector,is halved to 800 PJ(45%)by mid-century.This reduction can be attributed to energy-efficiency gains with the installation of heat pumps and the decline of less efficient heating methods like natural gas and bioenergy.Moreover,DNV fore-casts building retrofit rates of 0.8%,consistent with

282、 historical data(Behr et al.,2023).The NECP outlines a shift from combustion-based heating systems to electric heat pumps for both heating and cooling which aligns with our forecast with heat pumps will further disincentivize the installation and use of conventional gas and oil heaters,but only to a

283、 certain extent.Figure 3.11 compares the average levelized cost of space heating by technology.As we expect that Germany will keep its carbon price until the new EU Emissions Trading System(EU ETS)takes full effect,the gas price will increase only slightly,making gas boilers more cost-efficient comp

284、ared to heat pumps until the late 2040s.While heat pumps have the advantage of high levels of efficiency compared with a gas boiler,their operational expenditures are very sensitive to the electricity price,which will stay at a high level throughout the forecast period.Furthermore,to make a heat pum

285、p work effectively in homes,addi-tional investment in insulation,larger radiators,and changes to pipework are often required.In many other cases,depending on the region,building type,and age,heat pumps can operate very effi-ciently without additional investment,making them economically attractive fo

286、r homeowners.Over time,supply-chain constraints will diminish,further increasing this attractiveness and causing a constant growth in heat pumps market share.As a result,we forecast that gas boilers share of newly installed heating systems will decrease from 40%to 15%between now and 2050,which also

287、means that inertia persists in the energy system as such boilers typically last around 15 years.This inertia will inevitably slow the energy transition while simulta-neously driving the demand for biomethane(mixed with natural gas),which during our forecast period is the only energy carrier capable

288、of decarbonizing combustion-based heating systems.We forecast the biomethane share of space heating technology to reach 6%in 2050,proving it capable of supporting the transition in space heating.Based on the fuel costs alone,heating with hydrogen will,throughout the entire forecast period,always be

289、much more expensive than natural gas,which is why we do not see any application for hydrogen boilers in space heating.10 million households will continue to rely on gas boilers for heating in 2050.30DNV Energy Transition Outlook Germany 2025HYDROGEN&CCS COMPETITIVENESSELECTRIFICATIONINVESTMENTSEMISS

290、IONSENERGY DEMANDENERGY SUPPLYPOLICYetc.)or unavoidable waste heat,increasing to 40%by 2040(WPG,2023).Programmes such as the federal funding for efficient heat networks(BEW)aim to allocate EUR 3bn to achieve the expansion and transformation of district heating in Germany (bmwk.de,2022b).Water heatin

291、gWater heating demand in residential buildings is mainly driven by individual behaviour,which is difficult to predict and depends on many factors such as people per household and washing habits.At the District heating is also an essential part of decarbonizing space heating.About 15%of space heating

292、,equivalent to about 6.3 million households,is provided by district heating in 2024.Our forecast indicates that this will grow to 28%,nearly 13 million households,by 2050.To ensure that district heating becomes a low-carbon and affordable source for heating,half of the pipeline-supplied heat should

293、be generated in a climate-neutral manner by 2030.By then,district heating networks should be supplied with 30%heat from renewable energies(bioenergy,geothermal,large-scale heat pumps,same time,water heating demand in commercial buildings mainly depends on the floor area.We expect that commercial flo

294、or area in Germany has plateaued,and that with increasing GDP per capita and more households investing in energy-saving appliances,the overall energy demand for water heating in Germany will decline.We forecast a decline from 770 PJ in 2024 to 410 PJ in 2050 for water heating.Increasing electrificat

295、ion,rising in the energy mix of water heating from 7%to 30%,is a contributor to overall energy demand reduction.CookingCooking is the second smallest contributor to energy demand,nominally greater than space cooling.Cooking comprises just 4%,130 PJ,of energy demand in 2024,and is forecasted to decre

296、ase to 72 PJ in 2050.We assess that food preparation in Germany is already predominantly electric at 91%and forecasts a further increase to 95%by mid-century.Space coolingSpace cooling in Germany is a negligible share of buildings energy demand at less than 1%.However,by mid-century increases in coo

297、ling degree days(CDDs)will nominally raise cooling demand to just 3%(52 PJ)of buildings energy demand.This is attributed to climate change;a warmer Europe will have more CDDs,which we expect to more than double by mid-century.In 2022,temperatures over 40C were observed for the first time as far nort

298、h as Hamburg.Additionally,Frankfurt am Main experienced 42 hot days in summer of 2018,far exceeding the national average of 20(UBA,2023).Since space cooling is 100%electric,we project that efficiency gains of new buildings will come from the lower u-value(the rate of transfer of heat),the retrofitti

299、ng of older structures,and improved digitalization and control of its usage.Appliances and lightingAppliances and lighting energy demand will remain constant through to mid-century at approximately 650 PJ/yr,equivalent to a third(34%)of total sector energy demand in 2050.Demand of useful energy is e

300、xpected to grow 30%by 2050 due to increasing GDP per capita,caused by a growing demand for appliances(rebound effect).However,we forecast continual improvement in energy efficiencies,compensating the increasing demand.We forecast data-centre energy demand to be 28 TWh,nearly 100 PJ,in 2050,comprisin

301、g 20%of commercial appliances energy demand,and 13%of commercial buildings energy demand.Increases in data-centre energy demand are counterbalanced by efficiency gains in appliances and lighting,leading to this segment being generally stable through to mid-century.A warmer Europe will have more cool

302、ing degree days,which we expect to more than double by mid-century.31DNV Energy Transition Outlook Germany 2025HYDROGEN&CCS COMPETITIVENESSELECTRIFICATIONINVESTMENTSEMISSIONSENERGY DEMANDENERGY SUPPLYPOLICYData centres are essential infrastructure that enable the operation of digital products and se

303、rvices and telecommunications,but also present significant future challenges in terms of energy demand.The growth in electricity demand for data centres is increasing rapidly,driven by the expansion of cloud storage,the digitalization of the economy,artificial intelligence,and cryptocurrency.Frankfu

304、rt is considered one of the FLAP-D markets(Frankfurt,London,Amsterdam,Paris,and Dublin),which represent the major data-centre hubs in the EU(German Datacenter Association,2024).Annual energy consumption and growth projectionThe European Commission estimated German data centres consumed approximately

305、 14 TWh(50 PJ)in 2022,equating to 3%of total electricity consumption in Germany(Kamiya et al.,2024).The German Data-center Association(GDA)reports approximately 17 TWh in 2024,which further reinforces the expected upward trend(GDA,2024).The GDA expects over EUR 2bn of investment annually into data c

306、entres in the period 20242029,equating to more than 1,000 MW of additional capacity in Frankfurt and 450 MW in Berlin a doubling and quadrupling of capacities,respectively.We forecast that continued investment will lead to an increase by 65%to 28 TWh/yr by 2050.However,overall electricity consumptio

307、n will double by 2050,such that data centres will continue to represent a 3%share.The projected increases in energy demand pose a considerable challenge for the German electricity system,which must supply consistent energy for optimal IT operations;however,future growth must be in compliance with EU

308、 and German regulations.Efficiency is the foremost key to meeting future regulatory demands.Renewables and energy recovery will also play important roles.The European Energy Efficiency Directive(EED)requires data centres of 500 kW capacity and greater to self-assess and report on energy,renewables,a

309、nd water consumption as well as waste heat generation and reuse(GDA,2024).The Federal Energy Efficiency Act(EnEfG)further stipulates quantified targets for data centres of 300 kW and larger.New data centres from 2026 must achieve a Power Usage Effectiveness(PUE)of 1.2(GDA,2024).This means the overhe

310、ad energy use cooling,lighting,other non-IT equipment energy consumption should at most be an additional 20%of total energy consumption.Existing data centres must also eventually reach a PUE of 1.3 by 2030.Moreover,large data centres of 1 MW and above must provide at least 10%of waste heat to distri

311、ct heat operators by 2026 and 20%by 2028.Renting space in a dedicated data server facility,or colocation,may be a quick path to achieving the energy reduction goals,as average colocation centres already achieve a PUE of 1.3;however,many enter-prises still operate their own data centres.Numerous oper

312、ational and technological innovations are available to meet the requirements.The most notable is the hot and cold aisle room configuration which segregates and keeps air gradients from mixing.Studies have shown more than 50%of conventional air conditioning energy consumption could be reduced through

313、 this method(Schmidt,et al.,2012).Additional solutions include liquid-cooled server racks and on-site renewable energy generation (GDA,2024).Data centresThe German Datacenter Association expects over EUR 2bn of investment annually into data centres in the period 2024-2029.32DNV Energy Transition Out

314、look Germany 2025HYDROGEN&CCS COMPETITIVENESSELECTRIFICATIONINVESTMENTSEMISSIONSENERGY DEMANDENERGY SUPPLYPOLICYGerman manufacturing is a stronghold but clouds are gathering German industry has built its strong position through stability,innovation,and productivity at moderate energy costs.These fun

315、damentals are changing as we see:A geopolitical shift that raises concern for national/regional security.Such priorities might override purely commercial considerations and lead to increased costs.Regional blocks/tariffs that raise new challenges,with competition from other continents,China,and the

316、US being the most evident.India might also rise as a challenger.This will hamper markets for some industries but could strengthen them for others.Energy-intensive industries in particular chemicals,steel,metallurgy,building materials,paper,and glass have seen considerable increases in their energy c

317、osts due to changed energy import structures since 2019.Germany has managed to implement bold measures in the transformation of its energy system.But to provide a stable energy system,many decisions remain to be taken and implemented after the elections in February 2025.Germany and the EU are taking

318、 actions to support national and European goals and ambitions for security and industrial development in general,including reduced energy taxes for industry (see also Chapter 7),infrastructure investments,and continued support for innovation to increase the value added per energy unit used.Therefore

319、,we find that given the importance of German industry,measures will be implemented as indicated above to ensure that industry will have a stable and reliable framework to meet challenges and sustain operations even if there are substantial changes in the locations of links in supply chains.The Manuf

320、acturing industry is key for Germanys GDP growth,contributing about 24%to the nations gross value added,with an additional 6%from construction and mining,according to the German statistics office.The largest industrial sectors are manufacturing goods(including automotive and mechanical engineering),

321、chemicals,and the electrical industry.As shown in Figure 3.12,manufacturing requires 2,350 PJ of energy annually today,a quarter(26%)of the German economys total energy demand.Due to efficiency gains and sectoral shifts,total energy demand for manufacturing will decrease to 1,850 PJ by 2050.Because

322、of the many hard-to-abate processes in manufacturing,the decrease is lower than the national average,and the sectors share of national energy demand will therefore rise,reaching a third(32%)by 2050.3.3 MANUFACTURING ENERGY DEMAND 33DNV Energy Transition Outlook Germany 2025HYDROGEN&CCS COMPETITIVENE

323、SSELECTRIFICATIONINVESTMENTSEMISSIONSENERGY DEMANDENERGY SUPPLYPOLICYAct on the Permanent Storage and Transportation of Carbon Dioxide(BMWK,2024b)lays the ground for a comprehensive legal framework.Energy transition expectationsIn total,we forecast that demand for energy in manu-facturing will decre

324、ase 22%to 1,850 PJ by 2050.The switch between energy carriers can be seen in Figure 3.13,similarly,the energy demand split between subsectors follows in Figure 3.14.Electricitys share in the sectors energy demand will grow to 52%by 2050,and hydrogen will see solid growth from 2035 onwards to provide

325、 21%of the energy demand by then(see Section 4.2 for further details on future hydrogen demand).The growth of these energy carriers reduces strongly the direct use of fossil fuels,which have a 52%share in manufacturings energy demand in 2024 and just 11%in 2050.The manufacturing sector in our analys

326、is consists of the extraction of raw materials and their conversion into finished goods.However,fuel extraction coal,oil,natural gas,and biomass and conversion(including refineries),are not included here.Manufacturing in our Outlook covers the following subsectors:Chemical industry Chemicals with th

327、e sub segments pharmaceutical,inorganic materials,agrochemical materials,and plastics is one of the large energy-intensive manufacturing subsectors.In addition,current fuel consumption for non-energy use as feedstock(497 PJ/yr)requires more fossil fuel than is demanded for energy(464 PJ).Consequentl

328、y,the industry was hit from two directions by the substantial energy cost increases from 2021.Utilization of production capacity of plants in the chemical industry was only 75%in 2024 and the production from this industry declined by 17%from 2018 to 2024(VCI,2024a).The chemical and pharmaceutical in

329、dustry accounted for overall revenues of EUR 225bn in 2023,down 14%on the record-high of EUR 261bn in 2022.Like many other industries in Germany,chem-icals and pharmaceuticals has been confronted with multiple challenges,energy costs being one of the largest.This effect is further intensified by inc

330、reased global competition.Due to the large number(about 480,000)of direct employees in chemicals,and Enabling industry development through infrastructure With the structural threats and challenges facing German industry,the willingness to transform to achieve climate neutrality by 2045 is still ther

331、e but requires significant support from the state and relevant authorities to incentivize new value chains and thus enable long-term investment in transformation.Infrastructure needs for industry to transition include:Upgrading and reinforcing electricity grids to provide transmission and distributi

332、on capacity for the massive increase in renewable generation.Together with flexibility and market design,this is assessed further in Chapter 5.A Germany-wide hydrogen network to develop a hydrogen economy is pushed forward to facilitate transition in areas where direct electrification is not possibl

333、e,such as in high-temperature industrial processes.The measures include electrolyser capacity-building and a nationwide hydrogen pipeline network.This is looked at further in Section 6.1.Carbon capture and storage(CCS),as it will reduce emissions for big industrial emitters that can capture CO2 in their process streams.The capture costs and the possible costs of further purification processes vary