Germany’s Energiewende (energy transition) represents a pioneering effort to shift from a fossil fuel- and nuclear-based energy system to one that is sustainable, efficient, and driven by renewable energy sources. Emerging from antinuclear activism in the 1970s, the Energiewende has evolved into a comprehensive transformation aimed at achieving climate neutrality by 2045. As one of the most ambitious energy transitions globally, Germany’s experience offers valuable insights for policymakers around the globe seeking to advance their national energy transitions.

Key Achievements and Insights

Germany has achieved several milestones in its Energiewende journey, highlighting the importance of consistency in policy frameworks and community engagement in driving large-scale energy transformations. Key achievements include:

Substantial Reductions in Greenhouse Gas Emissions

Between 1990 and 2023, Germany has reduced greenhouse gas (GHG) emissions by 46%, achieving this while growing its real GDP by over 50%. This progress was facilitated by the increased use of renewable energy, improvements in energy efficiency, and a shift to lower-carbon fossil fuels like natural gas. Germany’s approach, supported by foundational policies such as the Renewable Energy Sources Act, demonstrates the effectiveness of combining stable policy frameworks with financial incentives to drive substantial emissions reductions.

Transformative Growth of Renewable Energy in Electricity Generation

Germany’s focus on renewables, particularly wind and solar, has led to a 50% reduction in specific CO₂ emissions from electricity consumption between 1990 and 2023. This growth was underpinned by long-term, technology-specific support mechanisms and a commitment to fostering innovation, leading to a dramatic increase in renewable capacity. Germany’s experience shows how consistent, supportive policy environments and early investment in renewable technology can enable rapid expansion and cost reduction, benefiting other countries by helping lower the global costs of these technologies.

Sustained Public Support and Participation

Germany’s energy transition has enjoyed strong public support, in part due to inclusive policies that enabled widespread ownership of renewable installations and local benefits for communities near renewable projects. For other countries, Germany’s experience highlights the importance of engaging communities directly and ensuring they benefit economically from renewable projects to maintain public buy-in for energy transitions.

Key Challenges and Lessons Learned

While Germany has achieved substantial progress, it faces ongoing challenges in sectors where progress has been slower:

Buildings Sector Efficiency

Germany’s efforts to improve the energy efficiency of buildings have progressed more slowly than expected, with retrofit rates remaining around or below 1% annually—half the target rate. Barriers include high up-front costs and limited incentives for landlords in rental properties, an issue that could also affect other densely populated countries. Germany’s experience suggests the need for simplified renovation processes, supported for example by “one-stop- Executive Summary Germany’s Energy Shift: Achievements, Challenges, and Lessons Learned Discussion Paper Navigating the shops”, and targeted incentives for building owners, to support and accelerate energy efficiency improvements.

Transport Emissions Reduction

Germany’s transport emissions have decreased only 11% between 1990 and 2023, despite gains in vehicle efficiency and biofuel use, mainly due to increased freight and passenger transport volumes. Many countries with significant automotive sectors or high levels of freight activity may face similar challenges. Germany’s approach—focusing on electric vehicle adoption and increased rail investment— underscores the importance of integrating multimodal strategies and strengthening green transport infrastructure.

Shifts in Public Perception and Social Equity Concerns

While support for the Energiewende remains high in Germany, recent challenges, including high inflation and increased energy costs, have shifted public priorities, with some questioning the fairness of climate policies. Germany’s experience demonstrates the importance of addressing social equity within climate policy frameworks, especially for measures that may place a financial burden on lower-income households. The concept of “climate money,” a per-capita reimbursement of some of the government’s revenues from the sale of CO₂ certificates, failed to be implemented by the recent traffic-light coalition in Germany, but could be an attractive concept for Germany and other countries seeking to ensure equitable transitions.

Market Flexibility and System Optimization

As variable renewables make up a larger share of Germany’s electricity mix, the need for market flexibility and a supportive regulatory environment for storage technologies has become increasingly apparent. Investments in energy storage and flexibility on the demand side have grown, but Germany’s experience underscores the importance of market adaptations to ensure stable energy supply and efficient integration of renewables. Other countries should consider early market reforms to support flexibility on the demand and supply side, particularly as they scale up variable renewables like wind and solar.

Prospects and Pathways for Policymakers

Germany’s Energiewende demonstrates that achieving ambitious climate targets is technically and economically feasible. However, lessons from Germany’s experience underscore the need for a strategic mix of strong policy frameworks, broad stakeholder engagement, and social equity considerations. Key takeaways for policymakers include:

Consistency in Policy and Investment

Stable, long-term policies and targeted financial support are crucial to drive investment and innovation in renewable technologies.

Community and Stakeholder Engagement

Broad public participation, coupled with community benefits, can build lasting support and ensure that energy transitions are both equitable and widely accepted.

Focus on Technological Flexibility

Developing flexible electricity markets and supporting technologies like battery storage are essential for integrating high shares of variable renewables and ensuring reliable energy supply.

The opinions expressed in this text are solely that of the author/s and do not necessarily reflect the views of the Israel Public Policy Institute (IPPI) and/or its partners.