Wind turbines

    Renewable energy and grid expansion A success story

    The global potential in terms of renewable energy is enormous. Theoretically, sun, wind, water, geothermal power and biomass have the capacity to generate a thousand times more energy than the entire global population needs. This tremendous potential is not yet being used as well as would be necessary to meet the internationally agreed binding climate targets, however.

    When the Renewables Conference took place in Bonn more than 20 years ago, the rise in the use of renewable energies could hardly have been imagined. Since then, solar and wind power have become able to compete with fossil fuels in terms of cost and are firmly established on world markets. Their market share is growing every year. The International Energy Agency (IEA) keeps reporting new records. In 2023, 560 gigawatts (GW) were added and another 585 GW in 2024. More than 90 per cent of the new electricity generating capacity which has been added comes from renewable energy sources.

    A similarly high level of new development is forecast for the coming years. The International Energy Agency (IEA) calculates that as soon as the end of 2025, more electricity will have been generated worldwide from renewable sources of energy than from coal. At the end of 2026, electricity output from solar and wind power is set to overtake electricity output from nuclear energy. Renewable energies – which in addition to solar and wind power also include hydropower, geothermal power and biomass – are thus the centrepiece of the global energy transition and of efforts to protect the climate.

    Yet the speed of the transition is not fast enough to achieve a tripling of renewable energies by 2030. This is the goal that was set by the international community at the global climate conference in 2023 in order to get significantly closer to the 1.5-degree target of the Paris Agreement. In order to make significant progress, between 2024 and 2030 more than 1,000 GW of renewable energy capacity will need to be added each year. That is equivalent to more than 15 times the onshore wind power capacity currently installed in Germany. Currently, the amount of capacity being added globally each year is at best a little more than half the amount that will need to be added. That is why – despite the headway that has already been made – the build-out needs to keep progressing rapidly.

    BMZ activities for an accelerated energy transition

    The BMZ is a strong proponent of an accelerated energy transition, working intensively with its partner countries to achieve this goal. Especially in many developing countries and emerging economies, the potential for renewable energy is very high. This is also the case in Africa, where – thanks alone to the intensity of the sun’s rays – many countries could make a huge contribution to the global energy transition. However, there are various obstacles in the way, like low levels of investment, deficits in the policy framework, weak power grids and a lack of energy storage systems.

    This is the backdrop against which the BMZ is supporting the use of renewables at all levels: grid-based solutions, mini-grids and decentralised solutions. In addition, Germany advises ministries and regulatory authorities in partner countries on topics like feeding power from renewable sources into energy grids, charges for grid use and designing electricity markets. Financing takes many forms: grants and loans, setting up specialised funds and also, increasingly, mobilising funding from the private sector, because the demand for financing for the global energy transition is enormous. In Africa alone, 200 billion dollars a year needs to be invested – and that cannot be achieved just by using public resources.