Germany has to invest roughly 300 billion euros ($325 billion) by the middle of the century to prepare its power systems for decarbonization, according to state bank KfW (KfW.UL) on Tuesday.
“The necessary expansion of renewable energies makes suitable and flexible transmission and distribution networks necessary and requires high investment,” KfW stated at a capital markets conference at its Frankfurt headquarters.
“The means for that cannot come from public funds alone but must for the larger part be mobilised via private investors or the capital market,” the document said.
The remarks came as over 150 representatives from infrastructure and pension funds, insurers, banks, and energy firms gathered at KfW to discuss investment potential as Germany shifts away from fossil fuels and toward renewables.
Among the participants at the event are Deutsche Bank CEO Christian Sewing, Allianz CEO Oliver Baete, Uniper CEO Michael Lewis, and German Economy Minister Robert Habeck.
Germany plans to be carbon neutral by 2045 and increase the amount of renewable energy sources in the country’s power mix to 80% by 2030, up from more than half in 2023.
($1 equals 0.9238 euros).
Germany plans to achieve greenhouse gas neutrality by 2045. It has set interim targets of reducing emissions by at least 65 percent by 2030, compared to 1990 levels, and 88 percent by 2040.
The country’s first national climate law, passed in 2019 and modified in 2021, establishes annual reduction objectives for certain sectors like industry and transportation until 2030. These goals align with European aims to reduce greenhouse gas emissions.
If a target is missed or exceeded, the law says that the difference will be divided evenly among the sector’s remaining annual emissions budgets until 2030 and beyond, with additional targets set for 2040 and 2045. The ambition of Germany’s national climate targets can be increased but not decreased.
Germany‘s climate law further stipulates that new emission budgets for years after 2030 will be established in 2024, and that they must be consistent with the law’s goals and the European Union’s obligations for climate neutrality by 2050.
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