A new report commissioned by the Regulatory Assistance Project (RAP), the European Climate Foundation, and Agora Energiewende 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. Positive Effekte von Energieeffizienz auf den deutschen Stromsektor (Positive Effects of Energy Efficiency on the German Electricity Sector) 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 power system—even with greater use of renewable energy.

“Energy efficiency makes macroeconomic sense because many energy efficiency measures are substantially cheaper to implement than investments in power system infrastructure,” said Richard Cowart, director of European programmes at RAP. “Every saved kilowatt hour generates power system cost savings between 11 and 15 Euro cents in 2035, helping to achieve the Energiewende at least cost.”

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.

As policymakers consider how to achieve the Energiewende at the lowest cost to society, energy efficiency must not be overlooked. Public investment in energy efficiency, which benefits all system users and regulatory intervention to remove barriers to private investment in energy efficiency will help reduce the cost of meeting the Energiewende.

Prognos AG and the Institut fur Elektrische Anlagen und Energiewirtschaft (IAEW) conducted the analysis, with close review and input by RAP. It considers a business as usual scenario compared to varying levels of power consumption. All scenarios assume the share of renewable energy will rise to 81 percent by 2050.

Visit RAP’s Making Germany’s “Energiewende” (Energy Transition) a Reality page to learn more about our work in support of the Energiewende.