Germany is on the crest of the green wave that will make the environmental industry the most important sector of the economy by the year 2020 and the country’s largest job creation engine. “Environmental technology will be the leading industry of the 21st century,” says Burkhard Schwenker, CEO of Roland Berger Strategy Consultants. The consultants have analyzed the industry’s prospects and surveyed 1,300 companies and 200 research institutions on the subject. Their findings give grounds for great expectations: the turnover of the global environmental industry will more than double by 2020 to a total of 3,100 billion euros. And Germany is at the forefront of this development thanks to its green champions. Its business with solar, wind and hydro energy is already an export success.
German firms can be counted among the world’s technology leaders. Their world market share in the future-oriented sectors of photovoltaics, solar thermal energy and wind and hydro power is already between 21 and 35%. When it comes to biogas producers, Germany dominates the market: “90% of the equipment is produced in this country,” says business consultant Torsten Henzelmann. The new boom industry will account for 14% of German domestic product in the year 2020. Some 2.2 million people will be employed in this sector in 10 years’ time – the current total of 1.1 million is only half that.
The economy is therefore about to undergo profound change: the country will no longer be characterized by cars, chemicals or engineering, but green high technology will provide jobs and prosperity. In fact, green high-tech moved out of its ecological niche and into the limelight some time ago. The environmental movement of the early years undoubtedly helped it on the road to success. It cleared the path within society and in politics. Strict environmental laws and subsidies favoured the rise of environmental firms. “Environmental technology is one of politicians’ favourite children and receives support accordingly,” says Henzelmann.
With the zeitgeist behind it, German engineering talent was able to unfold and prove its superiority in a whole series of disciplines: renewable energies, efficient resource and materials management, sustainable mobility, ecological water management and waste disposal. Green technology “made in Germany” has always been at the forefront of development. “Although America and China are catching up,” says Dietmar Edler of the German Institute for Economic Research (DIW) in Berlin, “Germany will be able to maintain its competitive edge. Its technological advantage and its know-how are considerable.”
Since the environmental industry offers attractive returns, private investors are also putting more and more money into green technology. Business start-ups are forming partnerships with established industrial companies, which are bringing capital and experience into the sector. Automotive supplier Bosch, for example, has declared environmental technology to be a new and additional source of income and has put enormous resources into appropriate firms. Even representatives of the old economy have no reservations about working with the new environmental scene. Thus, for example, Voith, the typical Swabian family-owned engineering firm with a proud history stretching back 140 years, is developing electricity generation using wave power off the coast of Scotland.
Siemens, one of Germany’s largest global players and also 160 years old, has also recognized the latest trend and recently decided to describe itself as “the world’s largest green infrastructure supplier”. Under the heading “Complete Mobility”, the Munich-based group is actively engaged in increasing energy efficiency worldwide. It is involved in Europe’s largest transport management project in North Rhine-Westphalia under the name Ruhrpilot. Siemens is also contributing to public transport systems in large cities like Oslo and Lisbon. And the group is also one of the dozen big-name firms that have initiated the visionary Desertec project.
The idea behind it is audacious: our energy problems can be solved by using the sun in the Sahara. The project envisages the production of carbon-free energy in the deserts of North Africa to meet 15% of demand in Europe and a substantial proportion of the needs of the producer countries. The costs of the project are put at roughly 400 billion euros but when construction could begin still remains open. It is planned to produce energy in solar thermal power plants. This technology uses mirrors to focus sunlight in order to raise the temperature of a heat transfer medium in a system of tubes. The electricity would then be transported more than 3,000 kilometres to Europe through a new transmission grid. Because they offer high energy conversion rates and the lowest electricity generation costs of all solar technologies, solar thermal power plants located in the Earth’s sun belt have the potential to produce electricity at costs comparable to those of fossil fuel-fired plants in the medium term. It is intended to set up the planning company in October. “The ecological and economic potential is enormous,” says Torsten Jeworrek, member of the Management Board of Munich Re, one of the driving forces behind the project.
The required technology – although still on a rather modest scale – can already be seen in Jülich near Aachen. A unique solar power plant began operating there in August: 2,500 mirrors direct the sunlight to the top of a 50-metre-high tower, where the solar energy is converted into electricity. “A gateway to the future of renewable energies,” says Environment Minister Sigmar Gabriel. The 22-million-euro plant is meant to feed 1.5 megawatts of solar electricity a year into the grid. That is sufficient to supply 350 households.
The search for renewable energies remains one of the great challenges of our time. Research and development is being conducted in all directions, usually with the participation of the major energy companies. This is also the case with Alpha Ventus, the first German offshore wind farm, 45 kilometres north of the North Sea island of Borkum. In the next few years, turbines with a total capacity of up to 40,000 megawatts are to be installed off the North and Baltic Sea coasts. These will then be able to supply eight million households with electricity.
Sun, wind and hydro are already being used to supply energy. The heat deep down inside the Earth also offers great potential. This promising technology is called geothermal power. Germany’s Federal Government has set up an appropriate support programme worth 400 million euros. In 2008 the number of employees working in this field doubled – from roughly 4,500 to 9,100. A geothermal power plant is under construction near Hanover that brings heat up to the surface from deep in the Earth. It is a magnificent idea since this energy source is inexhaustible and, unlike solar or wind energy, available around the clock.
In June 2009 the GeneSys pilot project commenced initial drilling and the plant should be extracting two megawatts of heating energy out of the ground in four years. The drills are digging four kilometres into the Earth to reach the heat. The underground temperature increases by roughly 30 degrees Celsius with each additional kilometre. But how can this be used to produce energy? The geothermal power plant pumps water down into the Earth, where it is heated by the geothermal energy to a temperature of around 150 degrees Celsius before being directed back to the surface where it is used to heat buildings. The project aims to save 15 million euros in fuel costs. If the experiment goes according to plan, “we will have gained a new model for wide areas of Europe,” says project leader Michael Kosinowski.
Whatever green technology German companies are researching and testing, they have their eyes firmly fixed on world markets. After all, it is easy to see that there are splendid opportunities for the environmental industry worldwide. The indicators are absolutely clear: the world population continues to increase, while resources remain finite. In 2030 two-thirds of the world’s population will be living in cities that will have to overcome huge ecological problems. If the emerging countries catch up in terms of industrialization and global prosperity increases, there will be an inevitable increase in the demand for clean energy and greater priority will be given to environmental friendly transport and climate protection.
Under President Obama, the United States is also increasing its reliance on green energy: 25% of its electricity is to be generated from renewable energy sources by 2025 – that offers magnificent sales opportunities for solar cells and wind turbines “made in Germany”. The efficiency of these installations is steadily increasing so that the costs are also dramatically decreasing – and will therefore become competitive in the not too distant future. “When renewables can compete with traditional energies in terms of costs, demand will skyrocket,” believes Torsten Henzelmann of Roland Berger.
The current crisis in the world economy is having little impact on the green champions. On the contrary, some of them are even benefiting from it. At last they are finding it easier to hire engineers. And even more important: governments are orienting their economic recovery packages towards ecological criteria. Practically every country is making money available for green technology.
For example, the United States is investing some 112 billion dollars in green technology. The main focus here is on improving hybrid vehicles and research into high-performance batteries. China is also spending nearly 20 billion dollars on green technology. Europe’s recovery packages are making six billion euros available for renewable energies. Some 3.5 billion euros are flowing into energy infrastructure, 500 million into offshore wind farms, seven billion into improving energy efficiency – in cars, buildings and factories. Between 2009 and 2011 the Federal Government is investing a total of 500 million euros in research in the field of electromobility. The goal focuses on key technologies for the integration of electric and hybrid vehicles into existing transport networks.
The potential for low-emission car technology is enormous, emphasizes the McKinsey consultancy. A turnover of 325 billion euros could soon be realized in this area. The consultants are forecasting a 30% annual growth rate. Hybrid vehicles, in which an electric motor supports an internal combustion engine, are expected to reach a market share of between 16 and 24% in 2020. Internal combustion engines will also be designed to achieve higher efficiency. Components for reducing fuel consumption will achieve a market volume of 30 to 35 billion euros. Eventually, electric cars and so-called plug-in hybrid vehicles (the battery can be recharged via the electricity network) will also play a significant role in the car industry.
“Without a doubt, the future belongs to zero-emission electric cars,” affirms Volkswagen CEO Martin Winterkorn, who has entered the race in Berlin, the e-mobility capital, with the Golf Twin Drive. Mercedes is testing the Electro-Smart there with RWE and BMW the Mini-E with Vattenfall – with electricity sockets behind sun-yellow fuel tank covers. The manufacturers are massively investing in battery technology, although it long seemed that the Japanese had an insurmountable lead. “If we keep this up, Germany has good chances of joining the world leaders in electric cars,” says Martin Winter, materials science professor.
There’s no question about it: eco is cool, eco creates jobs. Even car groups that are downsizing workforces are looking for electrical engineers to help them to prepare for the time after the internal combustion engine. The green champions represent a promising field for talented young professionals, says consultant Henzelmann: “You can rise up the career ladder quicker than in the traditional engineering industry. You can achieve more and assume responsibility earlier.”
