How is Germany transforming its energy system?

To reach climate neutrality by 2045, Germany aims to phase out fossil fuels from its energy mix, accelerate renewable energy deployment and reduce overall energy consumption. In 2024, renewable energy accounted for 20% of primary energy consumption.¹ This figure, while substantial, also shows that the transformation needs to happen significantly faster. 

The transformation of the power sector – responsible for 31% of all greenhouse gas emissions in 2000 – has been at the core of the Energiewende. Most progress to date has been in this sector, with the renewables share in power consumption increasing from 3% in 1990 to 55% in 2024. The transition must now accelerate in the other sectors, particularly in buildings, transport and industry. With the completion of the nuclear phase-out in 2023, there is now even greater emphasis on expanding renewable energy. At the same time, electricity is becoming a cornerstone of the energy system transformation. The share of electricity in total energy consumption is indeed growing, as it becomes more widely used in many applications, including road passenger transport, low-and medium temperature heating, cooling and water heating, where the use of renewable electricity has proven to be the most efficient way to decarbonise. 

Renewable energy and energy storage along with renewables-based (“green”) hydrogen – whether produced locally or imported – are expected to play a significant role in achieving net-zero emissions in Germany. Green hydrogen is particularly important for sectors that are difficult to electrify, such as shipping and certain industrial sectors like steel, as well as for use as a feedstock in industrial processes, especially in the chemicals industry (see: Green Hydrogen). 

Finally, an often overlooked yet central pillar of Germany’s Energiewende is advancements in energy efficiency, which is essential for a successful transition. Efficient use of electricity, heat and fuels simultaneously reduces overall energy consumption, greenhouse gas emissions and energy bills. Since 1990, Germany’s primary energy demand has declined by 20% even as GDP has grown by roughly 50%. Alongside an increase in electrification of end-use sectors, Germany’s current energy scenarios up to 2030 anticipate both continued primary energy demand reduction,² driven by increasing energy efficiency in households, buildings and industry, and a transition away from primary fuels like coal, lignite and gas in energy-intensive combustion-based power production and heating supply.