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Worthwhile business model for energy transition: Fraunhofer IWES presents funding strategy for German energy turnaround

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In a study that was published January  21.1.2014, „Geschäftsmodell Energiewende“ (business model energy turnaround), scientists show that investment is rather profitable in the energy turnaround and how this could be funded until 2050.

"Our extensive calculations show that the energy turnaround, even under very conservative assumptions and especially for institutional investors, is a highly attractive business" explains IWES Director Prof. Clemens Hoffmann. Even ambitious goals as a fully renewable energy supply are economically feasible after his convictions. "The cost argument for climate policy decisions is thus no longer productive."

Fossil fuels cost Germany 83 billion Euros a year
The basic idea is to compare the cost of capital-intensive investments in the necessary new technologies to savings that are achieved by the dismantling of the operating cost intensive technologies in the field of fossil fuels because the latter is associated with declining costs for primary energy and the import of primary energy. The experts believe that the investments in the infrastructure of renewable energy can be controlled in a way that the cost of primary energy from fossil fuels at the current 83 billion euros per year can be lowered over a period of 40 years, to practically zero. According to their calculations, the break-even point between the costs of the two strategies - the sum of the deployment costs for renewable energies and the procurement cost of fossil energy compared to the current primary energy costs - can be reached in 15-20 years.

New applications for renewable electricity in the heat sector
According to the experts, the important aspect now is the counter-financing to promote intensive new applications for renewable electricity in the heat and transport sectors as well as energy efficiency. Heat pumps should cover the requirements of the low temperature sector demand to about 75 percent and in the industrial sector, the power-to-heat technology should increasingly be used. On the other hand, there should be a reduction of about 25 percent in the conventional electricity use and in the heat sector, the installation of better heating systems and building insulation should be accelerated.


The energy revolution is a major global business opportunity and a successful German energy turnaround project could give the fight against climate change worldwide decisive impetus.


To read the full article in German, please go to the Fraunhofer IWES website.