Energy and Buildings in Germany’s Covid-19 Economic Recovery Package

• Hydrogen strategy: making Germany the home of power-to-X
• Energy efficiency: greening Germany’s building stock
• Power grids: sector coupling through the SINTEG program
• EV charging infrastructure: turbocharging the mobility of tomorrow
• Future forestry: adapting to climate change and moving to sustainable forestry
• Solar and wind power: higher expansion limits

Hydrogen strategy: making Germany the home of power-to-X

The German government has just presented its hydrogen strategy, which the recovery package will fund with an additional EUR 7 billion - a huge sum of money. The aim is to make Germany the leading supplier of hydrogen technology worldwide. The strategy covers the development of hydrogen production plants and their demonstration on an industrial scale.

We are going to see a lot of movement in this space in the coming years in Germany.

A total capacity of 5 GW, including the necessary offshore and onshore energy generation, is to be built by 2030. An additional 5 GW will be added by 2035 if possible or by 2040 at the latest. The coalition aims to promote the switch from fossil fuels to hydrogen in industrial processes.

A mandatory 10-percent PtL quota for aviation fuel and a demand quota for climate-friendly steel will be examined. The government also wants to promote the direct use of green hydrogen in aircraft engines as well as the development of concepts for hybrid electric aviation.

Energy efficiency: greening Germany’s building stock

The German government increased its focus on building efficiency in the climate package that came into effect at the start of the year, so the incentives for energy-efficient renovation and construction had already been given a dramatic boost before the pandemic.

On top of that, this new package stocks up the ‘CO₂ Building Renovation Program’ with a further EUR 1billion – taking it to an impressive 2.5 billion euros. The government also intends to use a further billion euros of federal funds to expand the existing program for the energy-efficient renovation of communal buildings and set up a new program for climate change adaptation measures in social facilities.

This is extremely good news for companies looking to expand to Germany with renovation technologies.

The vast majority of the buildings that will exist in Germany in 2050 have already been built. For us to have a climate-neutral building stock by then means we will need to push harder on energy-efficient renovation. The majority of construction investment was already going into existing buildings and the new, even greater volumes of funding announced in this package are only going to increase that.

Power grids: sector coupling through the SINTEG program

Germany’s SINTEG program develops model solutions to address the technical, business and legal challenges resulting from the digitalization of the energy sector and the transition to renewable energy. It looks at how to cope with fluctuating sources and loads, new business models and sector coupling as well as bringing together hundreds of actors in various showcase projects.

The program even includes regulatory sandboxes that allow companies try out new ideas that would otherwise not be possible under normal laws and regulations. SINTEG has received a lot of international attention – including from international companies looking to develop solutions with German partners.

It’s great that SINTEG and the Living Labs programs are getting a EUR 300 million boost.

EV charging infrastructure: turbocharging the mobility of tomorrow

With this stimulus package, the German government is investing an additional EUR 2.5 billion in accelerating the rollout of modern charger infrastructure as well as in R&D for e-mobility and battery cell production. The government aims to implement its charging infrastructure master plan quickly and with a particular focus on the uniform payment system.

Now is the right time for international companies interested in getting involved.

A new regulation will require that charging points be installed at all gas stations. The development of public charging infrastructure – for example at daycare and community centers, hospitals and sports fields – will also be intensified.

Future forestry: adapting to climate change and moving to sustainable forestry

After two years of drought, 2020 has also had a dry start. German forests are feeling the stress and the damage is becoming clear to see. The price of wood has fallen - partly due to the corona pandemic. Through the economic stimulus package, the federal government is providing a further EUR 700 million for the preservation and sustainable management of forests; including the digitalization of forestry work and support for investment in modern machinery.

Solar and wind power: higher expansion limits

In order to further accelerate the switch to renewable energy, the governing coalition intends to abolish the limit on photovoltaic installations immediately and raise the expansion target for offshore wind power from 15 GW to 20 GW by 2030, which would provide planning security for investments in this sector. There is now even a discussion about targeting 40 GW by 2040.