Benefits of Energy Efficiency on the German Power Sector
This paper examines five different scenarios with a range of power consumption trends and determines that a significant reduction in electricity consumption can reduce the mid- to long-term costs of the German power system—even with greater use of renewable energy. RAP, the European Climate Foundation, and Agora Energiewende commissioned the paper, which considers a business as usual scenario compared to varying levels of power consumption as the share of renewable energy increases to 81 percent by 2050. The paper demonstrates that increasing the energy efficiency of Germany’s power system will save 10 to 30 billion Euros in 2035, while reducing CO2 emissions and moving the country closer to its Energiewende goal. Every saved kilowatt hour generates power system cost savings between 11 and 15 Euro cents in 2035 and lower electricity consumption also reduces the need for expanding the transmission grid. The long-term need to expand the German transmission system by a cable length of 8,500 kilometers between now and 2050 can be reduced to between 1,750 and 5,000 kilometers through increased energy efficiency. In addition, energy efficiency can reduce expenditures for hard coal and natural gas imports by 2 billion Euros in 2020. Meg Gottstein, Andreas Jahn, and Chris Neme served as key advisors for the scoping and ongoing review of the project during its development.