Germany aims to build up local production capacity for green transition

Germany is considering measures to promote the expansion of local production capacity necessary for the rollout of renewable energy, economy minister Robert Habeck said on Monday after a meeting with representatives of the wind and solar industries and grid operators.

The federal government is weighing measures to strengthen the trust in the local market, create incentives for its development and support the technology innovation power in Germany and Europe, Habeck said at a press conference.

The local market needs a reliable investment environment to bring back production and this includes accelerated approval procedures and more areas designated for renewable energy generation, the minister noted.

On a European level, Germany is pushing for the provision of direct subsidies to support the build-up and scaling of local production capacity.

In order to be able to achieve the ambitious expansion goals for renewable energy, it is crucial for Germany and Europe to have sufficient technologies and jointly advance the expansion of the necessary production capacity, Habeck added.

The meeting comes against the backdrop of a study by PwC that estimates the potential annual volume of the German solar module market at between EUR 5 billion and EUR 7 billion (USD 7.17bn) by the mid-twenties. According to PwC, Germany‘s supply chains for solar modules and other components are even less diversified than those for coal and gas with only very marginal local production.

The study notes also that after the decline of the German and European solar module industry more than a decade ago, Chinese companies have been dominating the production of modules, components and raw materials with output capacities often more than 100 times larger than those of any of their European competitors.

(EUR 1 = USD 1.025)

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