Questions & Answers

How can Germany be both a green leader and remain an industrial powerhouse?

Renewables are lowering the wholesale power rate, which firms pay, and energy-intensive firms are largely exempt from the surcharge for renewable power. Energy-intensive industries therefore benefit from the cheaper electricity that renewable energy provides.

Industrial firms are increasingly generating their own renewable energy. For instance, BMW has four wind turbines installed at its production site in Leipzig, where it builds its i3 electric car. Other companies are putting solar on the roof of their buildings to offset compensation of more expensive power from the grid.

Companies that buy wholesale power are also benefiting from lower prices as those prices drop. Wind and solar are growing faster than nuclear and coal are being decommissioned, so these conventional power plants are running at lower capacity. Power plants that are more expensive also run less, resulting in lower wholesale prices.

Heavy industry also benefits from renewables in a number of other ways. Technologies like wind, solar, biogas, and geothermal power provide economic opportunities for traditional industries. For instance, wind turbine manufacturers are now the second largest purchaser of steel behind the automotive sector. A number of struggling ports in Germany are also positioning themselves for the offshore wind sector. The solar sector will support industries ranging from glass to ceramics, and farming communities will benefit not only from biomass, but also from wind and solar. The copper and aluminum sector is also poised to benefit from the switch to renewables. Thus, switching to renewable energy does not only result in developing new industries like solar manufacturing. These technologies also provide opportunities for traditional industries to become part of the transition to a renewable energy future.

Overall, Germans believe that high-tech green technologies are an industry for the future and see no contradiction between ecology and economics.