Areas of action

Energy and climate

Ulan Bator, Mongolia: Housing development with solar system for water heating. In the background a coal power plant.

The climate and energy sectors are closely linked. The energy goal (SDG 7) set forth in the 2030 Agenda intends to ensure universal access to affordable, reliable, sustainable and modern energy by the year 2030. Access to clean and affordable energy is a prerequisite for sustainable development. Households and public institutions depend on a reliable and affordable energy supply in order to prepare food, heat or cool living spaces and schools, run hospitals and provide clean drinking water. Companies and industries need reliable energy supplies in order to be able to produce and deliver goods and services. The agriculture, forestry and water management sectors require energy to be able to grow and process foods.

The expansion of energy access will, in turn, increase the global energy demand, which poses a threat to the climate. The climate goal (SDG 13) can, therefore, only be reached when global energy production focusses its expansion on renewable energies and energy efficiency measures. The role that energy plays with regard to global warming, therefore, makes it a key element of the Paris Climate Agreement from December 2015 (UNFCCC COP21). Parties to the Agreement recognize energy’s important role, with more than 90 per cent of them including energy-sector measures in their Nationally Determined Contributions (NDCs).

More than two-thirds of harmful greenhouse gases are produced in the energy sector by activities such as electricity generation and heating or cooling for buildings. At the same time,  global demand for energy is rising: the International Energy Agency (IEA) predicts that it will increase by nearly one-third by 2040. This increase is also a result of rising access to energy. There are currently more than 1.0 billion people without access to electricity; more than 612 million of them are in Africa. Another 3.0 billion people currently depend on firewood, charcoal, dung or plant residues for cooking and heating, with particularly harmful consequences for the climate.

Keeping up with the energy demand of households, companies and industry, while  limiting global warming in the long run, requires a transformation of the energy sector. A significant increase in the share of renewable energy sources within the entire energy mix is needed. To this end, BMZ has responded to partner demands in more than 40 countries since 2014 with over 4 billion euros of support for the construction of energy systems. Africa is the focus of German development cooperation in the energy sector. This cooperation has been recently reinforced with publication of the  Marshall Plan with Africa. Germany’s support to the energy sector will be more strongly oriented towards improving access to energy, with the goal of being responsive to the demands of citizens, municipalities and companies in rural areas and cities, as well as deploying decentralised technologies.

Reconciling energy demand with climate change mitigation

Developing and newly industrialising countries rich in raw materials depend in part on the expansion of fossil fuels such as oil and coal to meet the rising demand for energy. Sustainable alternatives in line with needs must be created for households, social institutions, small and medium-sized enterprises as well as industry. Only a transformation of the energy sector towards renewable energies can drive fossil-fuel phase-out, break fossil fuel path dependency, and thus reconcile energy and climate goals. In order to reach SDG 12 (Responsible consumption and production), the "carbonisation" in building up new energy systems must be avoided. Also, sustainable energy systems must be transformed in such a way that they provide the end user with high shares of renewable energy sources in a reliable, demand-oriented and inexpensive way.

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