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Climate change and development Energy and climate
The energy sector has a major impact on the climate. It accounts for roughly two thirds of all harmful greenhouse gas emissions. And these emissions must be reduced dramatically, which can only be achieved by phasing out of fossil fuels. At the same time, developing and emerging countries need more and more energy. Primary energy demand worldwide could grow by one third by 2040. The energy sector is facing two challenges that have to be resolved by the middle of this century.
One in eight people worldwide still has no access to electricity – that is about 600 million people in sub-Saharan Africa alone. Access to affordable, reliable and sustainable energy for all (SDG 7) is the prerequisite for economic growth, employment and poverty reduction and for quality education and health care.
Industry and mining, agriculture and the food industry all need energy to produce, store and transport goods. Households and public institutions also require reliable and affordable power supplies, for example in order to heat or cool and light buildings, run hospitals and provide clean drinking water.
In order to limit global warming on a long-term basis, it will be necessary to increase the share of renewable energy in the energy mix, improve energy efficiency and transform the entire energy sector. Only then will it be possible to supply more people with energy and halt climate change.
As the share of renewable energy sources rises, ensuring the reliability of energy supplies will be a challenge. Because solar and wind power fluctuate depending on the weather and time of the day. Consequently, comprehensive solutions are needed, such as creating conducive regulatory frameworks, modernising grids and operating them on the basis of digital technology, and integrating power markets across borders. Innovative models and technologies such as green hydrogen/Power-to-X, electric mobility and battery storage can speed up this transformation.
In order to secure sustainable development based on renewable energy, the Federal Ministry for Economic Cooperation and Development (BMZ) supports its partner countries in coping with the enormous political, economic and social challenges that come with establishing a modern and climate-neutral energy system. In this context, it is key to promote renewable energies, energy efficiency and access to sustainable energy at the same time. This helps to meet growing energy needs while reducing greenhouse gas emissions.
Energy supplies must be needs-based, reliable and sustainable – for households, social institutions, and small and medium-sized enterprises. This is the basis for promoting economic development, generating jobs and creating prospects for the future.
Developing and emerging economies that have large reserves of fossil fuels (oil, natural gas and coal) often not only export these resources, but also use them locally to meet the growing domestic demand for energy. Here, it will be crucial to provide alternatives and support the transformation of the energy sector towards renewable energies.
The BMZ focuses in addition on green hydrogen as a key resource for a successful energy transition and for achieving the climate targets. By means of electricity produced sustainably from wind and solar power, hydrogen can be generated from water – and this “green” hydrogen can in turn be used to produce climate-neutral fuels and fuel gas. For the BMZ’s partner countries, where the potential for renewable energies is often huge, this is a chance to create more skilled jobs, increase export revenues and improve local energy supply. Together with diverse partner countries, the BMZ is currently developing first industrial plants for “green hydrogen” in Africa. This includes the largest plant currently on the continent, with a capacity of 100 megawatts.
Facilitating the transition to sustainable energy
Through its bilateral cooperation programmes, the BMZ helps its partners create a sustainable energy supply and open up the market for renewable energy and energy efficiency products.
Working on behalf of the BMZ, the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH provides advice on new legislation, feed-in tariffs or subsidy reforms. It assists with the establishment of energy agencies and trains local experts. It raises awareness through education campaigns and supports the dialogue between government representatives, business and civil society.
To boost the market for sustainable energy, the BMZ provides loans and grants through the Kreditanstalt für Wiederaufbau (KfW) – in the areas of generation, transmission and distribution and for energy efficiency measures – for the expansion of power supply. Credit lines for climate-friendly products are established via national development banks, providing a crucial incentive for such further expansion.
The BMZ also works together with the private sector (External link) and makes use of successful global instruments and multilateral channels.
Working together for a sustainable energy future
At the multilateral level, too, Germany is working to support sustainable, climate-friendly energy systems.
A crucial role is played by the International Renewable Energy Agency (External link), IRENA, the REN21 policy network and the World Bank's Energy Sector Management Assistance Program (External link), ESMAP. Moreover, Germany is working with the SEforALL Initiative (External link) (Sustainable Energy for All). Within the EU Energy Initiative (External link) (EUEI), European partners coordinate their energy- and climate-related development cooperation activities.
Through its support policies, the BMZ contributes to the implementation of the Paris Agreement, which requires international financial flows to reduce greenhouse gas emissions and boost resilience to climate change.
In this spirit, the BMZ launched the multi-donor Global Energy Transformation Programme (External link) GET.pro to get European players to join forces in helping to create more favourable conditions for investing in a global energy transition. The platform mobilises private investment in decentralised power generation (GET.invest) and advises partner countries and regions on shaping their energy transition (GET.transform).
Energy is also an important issue in the BMZ's cooperation with multilateral development banks.
Through the Africa-EU Energy Partnership (External link) (AEEP), the BMZ provides additional support to encourage close cooperation between European players and Africa, with a view to advancing the transformation of energy systems on the African continent, a continent of opportunity.
As at: 22/09/2020