INSM Initiative Neue Soziale Marktwirtschaft GmbH
2023
An accelerated expansion of renewable energy sources and the increased use of efficiency technologies in industry reduce wholesale electricity prices and increase economic growth. This is the result of our short study for the Neue Soziale Marktwirtschaft Initiative (INSM).
If the expansion of renewable energies and the implementation of efficiency measures are accelerated, the amount of fossil fuel that has to be imported is decreased. In terms of efficiency measures in industry, fossil-fuel applications are often replaced with more efficient power applications. Therefore, while electricity consumption is increasing, through the expansion of renewable electricity generation this also means that wholesale prices will fall by 2030.
An acceleration on this scale will require additional investment in plants and buildings. But these measures also “pay off” economically – in addition to their necessity for climate protection. In the simulation period up to 2030, supported by lower electricity prices and reduced energy imports, the German GDP increases by around 1.7 euros for each additional euro invested. If all measures are implemented in 2030, the gross added value is four percent above reference development level. The prerequisite for this: the necessary additional work can (primarily) be realised by extending the working hours.
As a result, the acceleration measures will reduce the price of electricity and energy source imports, and increase investment. Every stimulus has a positive impact on economic performance in Germany.
In order to achieve the goal of climate neutrality in Germany by 2045, the expansion of renewable energies and the implementation of efficiency measures in industry will have to be accelerated. This will require additional investment of around 400 billion euros by 2030. Our short study for the INSM examined whether these investments are also worthwhile in economic terms.
We evaluated existing energy scenarios and adapted them to current price developments. The short study compares a “reference scenario” and a “target scenario” with accelerated development. The “interim target year” of 2030 was selected as the time scale, a step on the way to climate neutrality in 2045.
For this short study, our team used two models: our electricity market model was used to calculate the development of wholesale electricity prices. The economic impact was measured using our macroeconomic model.
On the INSM’s website you will find:
The study (PDF, in German)
Further information on the study (in German)
Project team: Dr Almut Kirchner, Dr Andreas Kemmler, Marco Wünsch, Jan Limbers
Last update: 6.3.2023
Partner, Director
Principal
Senior Expert
German industry is heavily dependent on raw materials and intermediate products from abroad, especially from China. Prognos analysed supply chains and developed recommendations for action.
On behalf of the BMWK, we evaluate the impact of the BEG in the funding period 2021 – 2025 together with ifeu, ITG, and FIW.
Foreign trade, employment, investment and raw materials: ahead of the new US administration taking office, we analysed for the Süddeutsche Zeitung how dependent our economy is on the US and China.
German industry can increase the resilience of its supply chains by sourcing its intermediate products from different countries. We have analyzed these new procurement markets.
How many laborers and skilled workers will Germany need for the green transformation of its economy? We examined this question on behalf of the German Chamber of Industry and Commerce.
Even if the global trade in goods is no longer growing, there are still promising markets for German business. We present 13 potential markets in Asia and Latin America.
With green finance, greenhouse gases in Austria can be reduced by up to four per cent by 2040 – in the bond market alone. This is the result of our study commissioned by the Ministry for Climate Action.
The automotive industry is undergoing fundamental change. How does this effect employment? And what will it mean for the individual professions? We investigated this on behalf of the VDA.
Higher numbers of care-dependent persons and increasing costs - our aging population is putting long-term care insurance to the test. A new analysis shows what the future financial require-ments will be.
The skilled-worker shortage is only due to get worse in the future. Our Potential Index shows: Increased digitalisation can help to cushion the negative consequences of the skilled-worker shortage in Germany.
Prognos is one of the oldest economic research centres in Europe. Founded at the University of Basel, Prognos experts have been conducting research for a wide range of clients from the public and private sectors since 1959 – politically independent, scientifically sound.