Security-orientated energy policy
A financing strategy for Germany's independence from natural gas
The ZOE Institute-hosted Energy Independence Council has published a feasible strategy for financing the shift away from natural gas in Germany, even in light of recent cuts to the federal budget.
The ‘Energy Independence Council’ is a panel of eight leading experts from the fields of finance, economic policy and technology who have worked for more than a year on recommendations covering the finance, industry and buildings sectors, and politics. Together these proposals can reduce Germany’s dependence on natural gas by up to 78%, and also serve as inspiration and a blueprint for other countries.
The proposals emphasise the urgent need to prioritise natural gas independence as a key component of a security-oriented energy policy for Germany. Since 2022, the replacement of Russian natural gas imports with liquefied natural gas (LNG) imports has exposed the economy and society to new import dependencies and higher inflation and climate risks, that can have drastic impacts on public finances as the energy crisis has shown.
The Council’s final report describes how government action can activate private sector investment and German industry as well as municipal utilities, energy service providers and housing companies following the cuts to the federal budget. Technologies for the electrification of heat generation in industry and buildings are readily available. Among a list of ten recommendations it proposes to scale up energy services, mobilize institutional actors like public utility providers and identifies which industry sectors should lead the way. Adjustments to the EU’s ‘green taxonomy’ in combination with a interest-rate benefits by the ECB enables the financial sector to support these actors by incorporating future risks into their investments decisions.
Ten recommendations for Germany’s independence from natural gas
The recommendations of the Energy Independence Council are deliberately broad in scope, going beyond regulation, carbon pricing and subsidies. They aim to create an investment environment that fosters trust. The following ten points can set in motion processes and feedback mechanisms that can create the momentum to make Germany independent of natural gas.
- Natural Gas Commission
- Support package for the municipal heating transition
- Scaling-up programme for heat contracting
- Practical checks for the heat transition
- ‘Heat-for-all’ Programme for vulnerable homeowners
- Skilled labour campaign for the heating transition
- Industrial Transition Accelerator Platform
- Aligning sustainable finance with change
- Targeted public funding
- Interest rate advantages for investments in energy independence
