Macroeconomic impact of the German energy transition and its distribution by sectors and regions

Abstract

Macroeconomic impacts such as changes in economic structures and employment are very important when evaluating the energy transition in societal terms. We employ a macroeconomic model that accounts for regional, economic and sectoral features. The model results show how the overall positive net impacts of the energy transition in Germany – energy efficiency and renewable energies - on economic growth and employment up to 2030 are distributed across sectors and regions. The biggest relative increases in value added occur in construction, real estate and electricity generation; the biggest decrease is in mining of lignite. Significant effects mainly result from changes in the heat and transport sectors, while the transition in the electricity sector entails smaller impacts. The latter are, however, relevant to the regional distribution: The model results suggest that especially northern and eastern German federal states will benefit economically from the energy transition because they offer attractive locations for investments. At the same time, these states are less affected by decreasing conventional energy generation. Moreover, the impact of rising electricity prices is less negative here than in the other federal states because of their lower electricity intensity in production. In summary, the energy transition represents an opportunity for these regions to strengthen their economies.