The Sun Has Won Research Note: German Renewables Growth and Economic Impacts
The Sun Has Won
Research Note: German Renewables Growth and Economic Impacts
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Summary: Germany continues its progress toward a cleaner, greener, more efficient economy. Renewable sources provided 55% of total German electricity generation in 2023 and surpassed 60% of total generating capacity. The rise in renewable generation is contemporaneous with 1) an increase in stability of the German grid, 2) an increase in GDP, and 3) a reduction in CO2 equivalent emissions. After spiking at the outset of war in Ukraine, wholesale electricity prices in Germany are falling and are now modest compared with peer economies in Europe. While the German economy is facing a variety of challenges, leading The Economist to wonder whether the country is “once again the sick man of Europe”, that man is breathing ever cleaner air and has an increasingly capital-efficient energy production system. Ongoing deployment of renewable energy production will lead to greater fitness and improving economic health. This Research Note updates and expands reporting and analysis from The Sun Has Won.
Figure 1: German national grid interruptions since 2006, share of renewable electricity capacity, and share of renewable electricity generated. (Sources: German Federal Network Agency and Fraunhofer ISE)
Figure 2: Top: German economic output per exajoule of primary energy consumption (calculated as GDP per unit of primary energy consumption). Bottom: German CO2 equivalent emissions, GDP growth, and Primary Energy (PE) Consumption. (Sources: World Bank, Destatis, Clean Energy Wire, Fraunhofer Institute)
Figure 3: German wholesale electricity prices compared to prices in Switzerland, Spain, France, Italy, The Netherlands, Poland, and Sweden. (Source: EMBER)