German energy transition could cost 300 billion euros less with greater efficiency, according to a study

According to a report released by the Boston Consulting Group on Thursday, Germany could save over 300 billion euros (326.49 billion dollars) by 2035 if it implements the energy transition in a more efficient manner.

Germany will spend hundreds of millions of euros in the next few years to transition towards cleaner energy sources, with a goal of being carbon neutral by 2045. Berlin is also under pressure from the industry to reduce energy costs that are stubbornly high.

The BDI report calculated the savings based upon current plans. It is estimated that the cost of operation, expansion, and maintenance for the energy system will be 1.57 trillion euro over the next ten years.

The study found that the investments in renewables, energy grids, and hydrogen currently planned far exceed demand. The result would be additional costs that could have been avoided.

In many cases, the planning relies on costly solutions like underground cables in place of overhead lines.

Jens Burchardt, a BCG partner, said that with better planning and coordination the energy transition would be more than 20% cheaper in the next decade.

According to the lobby, costs for the German electricity network have increased around 70% since 2010. Further increases are expected in the future. Gas prices in Germany are up to five times higher and electricity costs can be as much as 2.5 times more than international competitors.

The high energy prices in Germany are due to a number of factors, including the expansion of renewable energies at a cost and the drop in Russian gas imports following the Ukraine War.

Replace those Russian products

Germany boost

Imports of LNG from the United States or other suppliers can be several times more expensive than pipeline gas.

(source: Reuters)