German Energy Policy and Oil Consumption in Transition: 1995-2020s

German Energy Policy and Oil Consumption in Transition: 1995-2020s

Introduction: the situation before 1995
In 1995, German energy policy was still at a stage of high dependence on fossil fuels. Petroleum consumption was about 1330000000 tons, recording 40.3% of primary energy. In particular, a great deal of energy was used in the transportation sector, with 298,800,000 tons of gasoline consumed and 255,000,000 tons of diesel fuel. Although environmental awareness was gradually increasing and recycling laws were being enacted during this period, the energy structure had not yet been transformed.

Phase I: Development of Renewable Energy Infrastructure (2000s)
The Renewable Energy Act (EEG), which came into effect in 2000, marked a turning point in German energy policy. This law led to a rapid expansion of wind and solar power generation, and by 2005, renewable energy sources accounted for about 10% of domestic power generation. Major energy companies such as E.ON and RWE pursued large-scale offshore wind power projects, especially along the North Sea and Baltic Sea coasts.

In addition, CNG (compressed natural gas) buses were introduced in Stuttgart, promoting a low-carbon public transportation system. At the same time, measures aimed at improving energy efficiency progressed, and insulation performance of buildings and energy-saving technologies in industry were strengthened.

Phase II: The Energy Transition (2010s)
The 2010s was a period of full-fledged energy transition (Energiewende) in Germany, with the decision to phase out nuclear power following the Fukushima Daiichi nuclear power plant accident in 2011 and the announcement of a policy to shut down all nuclear reactors by 2022. At the same time, the share of renewable energy increased significantly, reaching 27% of domestic power generation in 2014. Of this, wind power and solar power accounted for 9.1% and 5.7%, respectively, establishing themselves as the main energy sources.

Coal consumption is also on the decline, having been reduced from 12.4 million tons in 2010 to 90 million tons in 2019. Especially in urban areas such as Berlin and Frankfurt, coal-fired power plants have been closed and the shift to renewable energy sources has accelerated.

Phase III: Establishment of Renewable Energy and Hydrogen Economy (2020s)
In the 2020s, the share of renewable energy reached 44.4%, and the "Coal Free Law" was enacted with the goal of eliminating coal-fired power generation. Based on this law, plans are underway to completely phase out coal-fired power plants by 2038.

In addition, hydrogen energy is gaining attention as a new pillar of energy: a 12,500,000 gigawatt hydrogen-capable gas power plant is planned for 2024, and a liquefied natural gas (LNG) to hydrogen conversion project is underway in the port district of Hamburg. In Bavaria, a hydrogen production facility utilizing electrolyzer technology is being built.

Contributions of Major Energy Companies
RWE has signed a contract to supply the Salzgitter steelworks with 64 million gigawatt-hours of green power per year starting in 2027, and E.ON is implementing smart grid technology to ensure an efficient power supply. BASF is also expanding the use of renewable energy at its Ludwigshafen plant to reduce its carbon footprint.