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Joined up thinking – the benefits of sector coupling for Germany's energy transition
10/5/2023
6 min read
Feature
Energy is consumed in three sectors: transport, industry and to heat and cool buildings. Connecting these three sectors will be crucial for the energy transition and is termed ‘sector coupling’. Here Saif Islam, a Senior Consultant, and Finn Bee, Research Analyst, at EUPD Research, describe the key benefits of sector coupling for Germany’s energy transition.
On 15 April 2023, Germany shut down its last three nuclear reactors. Coal-fired power stations are next up for closure. The coalition agreement between the governing parties calls for the phase-out of coal to be brought forward from 2038 to 2030, if possible. Germany is betting big on renewables to meet the projected increase in electricity demand. To make this bet pay off, the country is relying on technological innovations.
Sector coupling among prosumers (ie home-owners who generate and consume electricity from their own photovoltaic [PV] system) could therefore become a major factor. The combination of a PV system with a charging station or a heat pump has large efficiency advantages and is also the reason for many private individuals to invest in their own home power plant, as various studies from EUPD Research show.
Germany aims to achieve a carbon neutral economy by 2045, five years ahead of the wider European net zero target. In the shorter term, the country aims to generate 80% of the electricity it consumes from renewable sources by 2030. By the end of the decade, the government is targeting to bring 15 million battery electric vehicles (BEV) on German roads, supported by one million public charging points. In the building sector, emissions are to be reduced to 67mn tonnes of CO2 by 2030 (a 68% reduction compared to the 1990 levels).