Renewable availability as a location factor
20.07.2023
Source: Energy & Management Powernews
For companies, the supply of green power and a connection to high-performance networks is becoming increasingly important, according to a recent IW study. Not everywhere in Germany this is given.
"Essenzieller Standortfaktor wird die ausreichende Verfügbarkeit von grünem Strom zu global wettbewerbsfähigen Preisen sein!" quotes the study "Standortvorteil Erneuerbare Energien. The importance of the availability of renewable energies as a location factor in Germany" a representative of the chemical industry. The study, published by "EPICO KlimaInnovation", the Institute of the German Economy (IW) and the Climate Economy Foundation, shows: There is a "clear need for action" in southern Germany in particular.
According to a survey in the IW Future Panel 2023, 74.5 percent of companies in the manufacturing sector said they saw energy supply as an important location factor. In this context, 78.9 percent of companies rated northern Germany as rather good and very good with regard to a climate-neutral energy supply in the medium term. Only 30 percent of the companies surveyed said the same about the southern states.
In view of the commitment to climate neutrality by 2045, all sectors and industries face the challenge of covering their energy needs with renewable energies in the long term, the study says. Since other locations, especially outside Europe, have less ambitious climate targets and less stringent requirements, there is a risk of competitive disadvantages for local companies.
The policy must therefore act urgently in three areas:
- Standortfaktor erneuerbare Energien stärken: This also concerns the associated pipeline, storage and import infrastructure, including for hydrogen. Especially in the south of Germany, existing potentials would have to be raised here in order to enable a sustainable energy supply for the existing industrial locations. In contrast to northern German states, Bavaria and Baden-Württemberg, for example, have so far lacked the necessary expansion of wind energy. Solar energy, which is already well developed, cannot cover the electricity requirements of energy-intensive processes in particular. Also the climate-friendly heat supply as well as the development of the necessary infrastructures for electricity, hydrogen and perspectively also CO2 must be built up fast.
- Remove barriers to transformation: Here, the researchers call for, among other things, an adjustment of government-induced electricity cost components to encourage flexible grid-serving consumption. Also the incentives for the climate-friendly self-generation of electricity and heat should be increased, for example, by facilitated licensing and certification obligations and accelerated and simplified planning and approval procedures. Here, as well as in the designation of sufficient areas for wind energy, there are central opportunities for action at the state and municipal level to increase the quality of one's own location.
- Maintain competitiveness: In addition to the actual conversion to renewable energies, there is still a whole range of relevant location factors that need to be strengthened, especially in the field of transport and digital infrastructures. The availability of skilled workers also continues to play a very important role as a relevant location factor. Likewise, according to the researchers, the agreement and international climate protection commitments and their anchoring in trade agreements is important.
The Institute of the German Economy is a private economic institute that deals with economic and social policy, the education system and the labor market. Its supporting members are the Federation of German Industries (BDI), the Confederation of German Employers' Associations (BDA), and employer and business associations.
The 113-page study "Standortvorteil erneuerbare Energien: The Importance of Renewable Energy Availability as a Location Factor in Germany" is available on the IW website.
Author: Katia Meyer-Tien