Despite the fall in overall electricity generation, Frost & Sullivan predicts an increase in installed capacity from 153 gigawatts (GW) to 179 GW in 2020. This will be mainly due to the growth of solar and wind resources.
Frost & Sullivan's energy consultant Jonathan Robinson says, "Germany is already a leading European renewables market, but it will go beyond its EU obligations with significant further investment in the next eight years. However, the growth in renewables poses serious challenges and will require substantial investment in upgrading the existing power transmission infrastructure."
The agency predicts that photovoltaic capacity will treble and wind energy will increase by an average of two GW per year. Most changes are predicted to happen in the solar sector in particular. With the German government's decision, post-Fukushima, to rule out nuclear power by 2022, Germany has the opportunity to lead the way in the establishment of a new energy mix. German Chancellor Angela Merkel has already stated that Germany's "fundamental rethinking" of the energy policy will serve as an example to others, however, the new energy mix cannot be concluded without significant new infrastructure for power generation and transmission as well as grid interaction.
"Energy efficiency will be a big topic in 2012, as the EU moves towards forcing Member States to take action. The voluntary approach adopted in 2007 has largely failed, with minimal energy efficiency gains in most Member States. As usual in these matters, Germany is already leading the way, but it is likely that more will need to be done," adds Robinson.
The issue of potential blackouts due to the energy mix changes has also been clarified by the German BDEW (Federal Association of the Energy and Water Industry) who say that blackouts are unlikely in the next decade as Germany enjoys surplus energy capacity, good potential for energy efficiency savings and good border interconnections. This is despite what naysayers like RWE nPower's Group CEO Volker Beckers say, having called the new energy policy "romantic".
However, from now till 2020, according to Frost & Sullivan, coal will remain the leading fuel 37 percent of generation but Germany will experience a decline in lignite-fired output as older power stations are decommissioned. Germany's share of gas will also see an increase through an accelerated development programme though greater shares anticipated post-2020.
"Germany has of course always been a key market for power generation equipment, but there is now the need for across the board investment in generation, transmission and distribution. This creates interesting opportunities for equipment manufacturers and project developers," concludes Robinson.
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