Berlin, Germany

A New Space Race in Germany

Germany aims for a faster energy transition

A worldwide race to decarbonize is on, and each country’s performance relies on policy, ingenuity, and smart infrastructure. What does the race look like in Germany?

Germany is Europe’s heaviest carbon emitter, but it also has some of the most ambitious climate targets of any country in the world. Following amendments to legislation in 2021, Germany now has legally binding rules in place that aim to cut emissions by 65% by 2030 (vs. 1990 levels), and to then become fully greenhouse gas neutral by 2045.

 

Keeping to those targets will be a major challenge. Germany has been committed both to expanding renewable energy, and to winding down coal and nuclear, for well over a decade. However, the nation remains heavily reliant on oil and gas, which together represent 61% of total energy supply. With coal added, 77% of Germany’s energy is from hydrocarbons and a great deal of this is used in industrial processes that are difficult to electrify or decarbonize.

 

Coal and oil were always tabled for fast reductions, but social pressure and geopolitics are making reliance on natural gas increasingly untenable – sooner than many had foreseen. Germany’s energy policy must now focus on driving even faster expansion of wind, biomass, solar, hydrogen, and other low-carbon energy technologies, as well as the regulations and infrastructure required to support this.

Net zero will not happen if we do not cooperate together. 
Xiaohu Tao, Vice President, Business Innovation and Digital, in Energy Networks at E.ON
Kid on a kickboard between smart buildings

What is the New Space Race?

A New Space Race is a Siemens Smart Infrastructure thought leadership study about how infrastructure stakeholders view the immediate and longer-term future of our built environment and energy systems.

 

It is based on a survey of 501 senior infrastructure stakeholders from 10 countries as well as in-depth interviews and desk research. The research covered mainly commercial real estate (e.g. office towers, campuses, hospitals, data centers, or factories), public sector assets (e.g. community centers, transport hubs, education assets, or healthcare infrastructure), and energy assets (e.g. electricity grids, gas networks, wind farms, etc). Respondents were involved in infrastructure as owners, developers, or operators.

New operational frameworks, new business models, and new levels of collaboration are needed

These key elements – technologies, regulations, and infrastructure – are not all that is required. The scale of development and change required to meet Germany’s climate targets also demands new operational frameworks, new business models, and new levels of collaboration between stakeholders. “Net zero will not happen if we do not cooperate together,” says Xiaohu Tao, Vice President, Business Innovation and Digital, in Energy Networks at E.ON. “These are joint issues that impact everyone. Energy stakeholders should be innovating, sharing ideas and working together, because it is the most challenging and important issue for us all.”

 

It is therefore positive to see that 60% of Germany respondents say that their organization has adopted significant low-carbon or net zero targets (for the first time) within the past five years (close to the overall average of 66%). However, just 45% believe their organization will become a net zero contributor to global carbon emissions in, or before, 2025. This is significantly short of the average for all countries in the survey (66%).

Some 85% of Germany respondents say that more attention and investment should be given to improvements to energy efficiency and demand side management.

At the same time, Germany can do a lot to increase the energy efficiency of industry, infrastructure, and the built environment, thereby reducing pressure on energy supply. Some 85% of Germany respondents in our survey say that more attention and investment should be given to improvements to energy efficiency and demand side management.

Part of the route to better efficiency is through digitalization, but here there is also the need to accelerate progress. Most Germany respondents (70%) believe that the digitalization of buildings and power networks is lagging the progress of digitalization in most other industries. Meanwhile, just 13% say that their organization is making full use of the data they have available – significantly lower than the all-country average of 31%.

 

Enormous infrastructure changes are on the horizon in Germany, driven by the interdependent mega-trends of energy transition and digitalization. But this great transition must happen with the lights on – supporting uninterrupted economic, political, and social activities, day and night, and through whatever other threats, disruptions, and surprises lie ahead.

“We need to make sure we proceed intelligently,” says Tao, “This includes organizing robust systems, managing huge volumes of data, while ensuring uninterrupted services and positive customer experience. Above all, we need to ensure we manage cyber-security risk, because as organizations digitalize they can inadvertently add new vulnerabilities. The challenge is to innovate and transform, but at the same time, always remain safe and reliable.” 

Top 5 factors influencing future infrastructure development in Germany

Infrastructure stakeholders in Germany say these are the most important factors influencing future building and energy infrastructure projects.

Decarbonization perspectives from infrastructure stakeholders in Germany

Biggest impact technologies over the next five years

Germany’s energy and building industry leaders rated these areas the most impactful on infrastructure development over the next five years.

We would like to extend a special thank you to the diverse set of industry leaders and experts who shared their ideas and insights with us as part of this study.

This thought leadership study is based on a survey, in-depth interviews and desk research. It is not an academic or scientific research paper. Our goal is not to provide any final answers, but rather to start conversations, stimulate thought, and encourage infrastructure stakeholders to reflect on what today’s megatrends mean for the future of our energy system and built environment.

 

The survey included 501 respondents from 10 countries. The countries involved include those large-scale and/or highly advanced infrastructure assets and ambitions. It was fielded in June and July 2021.

Country                                                                                       
 

USA

20%

UK

16%

China

12%

France

12%

India

10%

Germany

8%

UAE

8%

Singapore

6%

Austria

4%

Sweden

4%

Primary role

 

Leadership, management, strategy

24%

Operations and maintenance

15%

Architecture and design

12%

Information technology, cybersecurity, software development

12%

Engineering or construction specialist

10%

Financial management or investment professional

5%

Sales, marketing, PR

5%

Data science, analytics, AI

4%

Consultant (e.g. management, sustainability, technology)

4%

Risk management, legal or regulatory compliance

3%

Property development

3%

Sustainability and/or efficiency specialist

2%

Industry

 

Architects, developers, construction, engineering

18%

Heavy industry and manufacturing

14%

Retail, hospitality, corporate, residential

12%

Public sector and education

12%

Energy (generation, transmission, distribution)

11%

Light industry (Food/beverage, data centers, transport)

10%

Healthcare and pharma

8%

Property/facility management

8%

Investors (trusts, funds, etc)

6%

Organization size                                                                  

 

50 - 249 employees

20%

250 - 499 employees

20%

500 - 999 employees

25%

1000 - 4999 employees

20%

5000+ employees

15%

Seniority

 

C-suite executive (or equivalent)

32%

I report directly to a C-suite executive

38%

My boss / manager reports directly to a C-suite executive

30%