Impulse #20: Set the course for climate neutrality now!

„Germany is facing a fundamental transformation of the energy landscape. This is a major task. We at ENGIE will make a contribution to a sustainable energy future.“

We're already in February. Was it the same for you that the start of 2024 literally whizzed by? I think it's important and right that so much is currently in motion in the energy industry. But more on that in a moment. First, I would like to introduce myself briefly: My name is Eric Stab, I have represented the ENGIE Group in Germany as Country Manager and CEO of ENGIE Deutschland AG since June 1, 2023. I am also operationally responsible for ENGIE's Networks and Infrastructure business unit in Germany and, as Managing Director Europe, for the ENGIE Group's European network activities. Most recently, I was Country Manager and CEO of ENGIE Romania for more than 13 years. My return to Germany is a return to my roots, as I started my career in Berlin in the 1990s. I am delighted to have the opportunity to contribute my expertise and experience here and, together with my colleagues, to support our customers in Germany on their path to climate neutrality in the best possible way. I have already been able to meet some of you in person over the past few months and hope to intensify the exchange through this Impulse format in our Zero Carbon magazine. You are also welcome to network with me on LinkedIn!

In action to accelerate climate neutrality

I joined ENGIE in Germany at a time when we are being called upon to set the course for the future. Our country needs to become climate-neutral and remain secure and economically successful. This requires a fundamental transformation of the energy supply. Both politics and business are called upon like never before to develop and implement goal-oriented, realistic solutions that will significantly accelerate the energy transition in this country and thus ultimately secure our country's future viability. This is an enormous task. It is our ambition at ENGIE to make a contribution to this. As a Group, we are clearly focused on climate neutrality and want to make a difference - in Germany, in Europe and worldwide. Our goal is to accelerate the transition to climate neutrality. We are a global reference in the field of low-carbon energy and services and have also set ourselves ambitious goals for Germany. Specifically, we will drive forward our activities in the following areas.

ENGIE sets an example for a sustainable energy future

Our first focus is on investing in renewable energies - and doing so on a massive scale. We currently have 7.6 gigawatts of renewable generation capacity under construction across the ENGIE Group (as of September 2023). In Germany, we have set ourselves the goal of expanding our onshore wind and solar plants by 200 megawatts per year from 2025. Incidentally, the repowering of the onshore wind farm in Karstädt in Brandenburg is one of our successful projects in this area in 2023. Beyond renewables, we are focusing on grids and gas storage: at ENGIE, we are aware that natural gas will continue to play a key role as a bridge energy source. We are equally committed to the gradual transition to green molecules such as biomethane and hydrogen. As we see these as drivers on the path to climate neutrality, we are also promoting corresponding projects in Germany. We also consider flexible energy generation and storage to be fundamental - both for the integration of renewable energies and for the success of the energy transition as a whole. We have therefore set ourselves the goal of becoming an important player in this area as ENGIE and offering battery storage capacities in the gigawatt range on the German market by 2030. Last but not least, we are positioning ourselves even more strongly as an investment partner and as an expert in the decarbonization of companies, municipalities and municipal utilities: around 5,500 specialists are developing and implementing targeted, future-proof solutions for more than 12,000 corporate customers across Germany in order to achieve "real" climate neutrality, i.e. "net zero". We work for organizations and companies of all sizes and from various sectors of the economy, from industry to data centers and hospitals to innovative residential real estate projects.

Setting the screws for the energy transition

In short, we at ENGIE have a clear vision and a defined plan for how we will play a greater role in the German energy market in the future. We want to contribute to the success of the German energy transition. What's more, we want to accelerate it. But let's be realistic: the major transformation towards climate neutrality can only succeed if we work together. In my opinion, the energy industry and politicians need to make the right adjustments now if the energy landscape in Germany is to change as planned. There is no doubt that we all want to phase out coal and strengthen renewable energies; there has also long been a social consensus on the energy transition. However, there are only six years left until the first important political milestone in 2030. In order for us to reach the first targets, more speed and clear political guidelines are essential.

Battery storage systems play a role in climate neutrality

When it comes to flexibility, the "big picture" is needed. In addition to rapidly available power plants, battery storage systems will have to serve as a back-up. Around 100 GW of battery storage capacity by 2030 - this is the demand assumed by the Fraunhofer Institute for Energy Research in Freiburg in a study. On the one hand, the stored energy is necessary for physical grid stabilization. On the other hand, we will use it for portfolio optimization in trading and supply. At ENGIE Deutschland, for example, we are seeing increasing demand from our customers for power purchase agreements (PPA) for 100 percent green electricity 24/7 - a logical demand in view of the climate targets. In other words, the growth in renewable energies logically requires an adequate expansion of storage capacities.

Gas distribution networks have a future

And I would like to add one more thought: In our opinion, it makes sense to plan and further develop electricity, heating and gas grids in a coordinated manner. Of course, there is an obvious trend towards the further electrification of energy demand and the expansion of district heating networks. However, it would be wrong to assume that gas distribution networks have no future. They are there, often largely depreciated and offer a secure and competitive supply. Even if the quantities distributed will undoubtedly decrease, gas networks can not only distribute hydrogen, but also, and immediately, biomethane and, tomorrow or the day after tomorrow, e-methane. The advantage is that these solutions, assuming they are really expanded, can be available quickly, are sustainable and customers could continue to use their existing appliances. Such an approach is much more efficient and cost-effective for the community than relying solely on electrification.   

My conclusion: Despite all the complexity, an increasingly clear picture is gradually emerging of how we can technologically move towards Net Zero. The right political framework conditions must now be created so that the energy industry can develop its innovative strength and creative drive. As ENGIE, we are aware of the responsibility that the transformation of the energy market entails for everyone involved - and our company is purposefully positioned to play an active role in shaping it.

Dear readers, what steps do you think are necessary to ensure that Germany does not lose momentum in the energy transition and that we accelerate the transition to climate neutrality? Please feel free to write to me with your thoughts and experiences on this topic. I look forward to exchanging ideas with you!

Yours

Eric Stab
Chairman of the Board of Management of ENGIE Deutschland AG