A current PwC study from March 2024 focuses on the energy transition in Germany and examines both ecological and economic aspects. The experts started from two scenarios, which they compared with each other. In the first Continue-as-before" scenario It is assumed that the expansion of renewable energies will continue at the current pace and that Germany will fail to meet its statutory target of climate neutrality by 2045. The study predicts that this would result in total costs of 13.3 trillion euros.
In contrast, a Accelerated energy transition scenariothat an increased and faster expansion of renewable energies and a more rapid modernization of electricity and heating grids will help Germany achieve its goal of climate neutrality by 2045. The total costs for this scenario are estimated at 13.2 trillion euros and could even be cheaper in the long term, as no further investment would be required after 2045 and energy costs would fall. The authors therefore recommend rapidly reducing greenhouse gas emissions and propose measures such as state-subsidized loans to increase acceptance of the energy transition.
PwC study: Energy costs make up the lion's share
The PwC study emphasizes that the Energy costs make up the largest share of the total costs of the energy transition, between 60 and 80%while the share of Investment costs only between 20 and 40% lie. In the accelerated scenario, investments in consumption sectors such as private households, industry, transport and others amount to around 5.3 trillion euros, compared to around 3.9 trillion euros in the "business as usual" scenario. The aggregate energy costs up to 2050 amount to around EUR 7.9 trillion in the accelerated scenario and EUR 9.4 trillion in the other scenario. Due to the Increasing energy efficiency the total energy requirement decreases, which also reduces costs. The energy costs in the accelerated scenario are around one trillion euros below those of the "business as usual" scenario.
Advantages through accelerated expansion
The economic advantage of the accelerated scenario increases as the observation period increases, as the positive effects of an emissions-neutral energy supply are reinforced. This scenario promotes New business models, more Investments and Sustainable jobs in the area of green technologies, which makes Germany more attractive in the global competition between locations. Although the results vary in the individual economic sectors, the overall economic advantage of the accelerated scenario clearly outweighs the disadvantages. The investment costs are mainly in the energy sector, particularly for renewable energies and electricity and heating grids.
PwC study considers return on investment
The investment costs are passed on to other sectors through commodity prices, grid fees and levies, which are included in the total costs for their carbon neutrality. In the private household sector, decarbonization mainly requires measures such as climate-friendly heat supply and improved building efficiency. In the accelerated scenario, the PwC study aims for an emission-free energy supply, with around half of households using decentralized electricity and 40% centralized heat such as district heating. The total costs increase by around EUR 0.5 trillion by 2050 compared to the "business as usual" scenario, although energy costs fall comparatively less sharply as the investments have not yet been amortized by then.
Long-term investments pay off in the industry
Various other studies have already identified possible transformation measures for the Industry which have been incorporated into this analysis. These range from a change of energy source to CO₂ capture and utilization. In the accelerated scenario, the industry's process heat is largely covered by electricity and green hydrogen. The total costs of industry rise more slowly in the accelerated scenario and are slightly lower in 2050, mainly due to increased energy efficiency. Energy costs are expected to rise, but can be offset by comprehensive energy efficiency measures, reducing them from 2045 in the accelerated scenario. Investments in accelerated climate protection are therefore long-term economical for the industry more favorable than sticking to the status quo.
Promoting e-mobility and process and building efficiency
The decarbonization of the transport sector is being driven by electromobility, public transport and rail freight transport. Additional investments are needed to increase the share of electric mobility to 80% by 2040 and to change mobility behavior. By 2045, the total costs in the accelerated scenario are lower than in the "business as usual" scenario, mainly due to electrification, which leads to significant energy cost savings. Climate protection investments in the transport sector are profitable in the long term, as they lead to lower cumulative total costs and are quickly amortized. In the commercial, retail, agricultural and municipal sectors, the focus is on heating buildings, increasing process and building efficiency and switching to electricity.
Conclusion on the results of the PwC study
The PwC study examines the energy transition in Germany from an ecological and economic perspective. It shows that accelerating the transition to renewable energies and the modernization of energy infrastructures offers considerable economic benefits in the long term. Not only for the economy as a whole, but also for individual companies. Although the overall costs could be similar to the "business as usual" scenario, energy costs would be considerably lower in the accelerated scenario, leading to this positive economic balance.
New business models, increased investment and the creation of sustainable jobs in the field of green technologies would also strengthen Germany in the global competition between locations. Despite sector-specific differences, the economic benefits of the accelerated scenario clearly outweigh the disadvantages. It is therefore advisable to accelerate measures to reduce greenhouse gas emissions and offer low-interest government loans in order to promote acceptance of the energy transition.
Further information in our white paper New obligations for companies: EU Climate Protection Act.