Keir Starmer’s meeting with German Chancellor Olaf Scholz has dominated the headlines recently. It seems the Prime MInister is determined to rekindle the positive relationship with the continent that was so badly damaged by Brexit.
Hardware and manufacturing businesses like Naked Energy were deeply affected by Brexit. Our technology is designed in Britain, but the main manufacturing hub is in Italy and over 90 per cent of our materials come from the continent. Brexit generated a lot more friction in getting goods in and out of the country. As an internationally-focused business with customers in Germany, this has been a major challenge.
Greater regulatory alignment with Germany and the EU will make it much easier for firms like Naked Energy to access to facilities, secure soft funding and buy the necessary equipment to accelerate our rollout. Regulatory alignment will help us develop more projects that rely on British manufacturing.
Greater cooperation when it comes to renewable energy can create British jobs and domestic growth while driving progress towards climate goals. The export of British clean technology to the EU will also support the continent’s security, as well as its economy.
It is worth pointing out that at the moment the Anglo-German talks can only be described as a positive sign. It is another thing altogether to actually get something in place – those of us in the renewable energy industry shouldn’t get too excited until we see a final deal agreed.
In the meantime, stronger relations raise the opportunity of more knowledge-sharing between the UK and Germany while talks progress towards a partnership.
While Germany’s net zero journey hasn’t been perfect, it has achieved some significant successes since Russia illegitimately invaded Ukraine in 2022. It’s well ahead of its annual target to roll out solar energy –Â more than 60 per cent of its electricity was generated by renewable energy in the first half of 2024. The country has made strides in heat decarbonisation as well, with 19.7 per cent of its heat demand being generated through green sources. We can clearly learn a lot from our German friends.
So what, exactly did the country do to achieve its recent decarbonisation gains?
First, Germany streamlined its planning and approval procedures, speeding up net zero as a result. Planning reform has been one of Labour’s key priorities since winning the election, so reviewing how Germany managed this could provide useful insights
Second, the country is quite progressive on capital grants for the commercial and industrial space to decarbonise their heat. This includes 30 per cent for commercial buildings, and grants for industrial businesses ranging from 40 to 60 per cent depending on their size. We have similar schemes for the residential sector in the UK, for example with heat pumps, but nothing for industry, where heat makes up 70 per cent of total energy demand. Germany can teach us a lot about the value of extending this to the industrial sector. Also, KfW, the state-owned German development bank, funds a lot of green technology and offers different subsidiary schemes. There’s no like-for-like comparison in the UK that offers the same innovative financing that’s helping to accelerate net zero that KfW is doing.
Third, Germany is very good at investing in several different renewable technologies and methods to avoid putting too much strain on the grid. The country, like most of Europe, has embraced a transition to heat pumps and electrified heat, but has also invested in technologies that can generate energy without using the grid.
Take solar thermal as an example, which uses the power of the sun to provide hot water and space heating for buildings. Germany has 14.4GW of solar thermal capacity, which is enough to heat over 12 million homes a year – all without adding any strain onto the grid. Frustratingly, the UK has not invested nearly as much into grid-edge technologies – we don’t have a chance of reaching net zero without doing this.
Finally, and most importantly, the German government has implemented a national target to decarbonise 50 per cent of its heat by 2030. This serves as an important north star that unites all stakeholders in the energy transition towards a common goal. The UK would be well-advised to implement similar heat decarbonisation goals for the residential, commercial and industrial space.
There’s still a long way to go on this Anglo-German partnership, and a lot more clarity needed on what it will mean for our relationship with the EU more widely. However, we can definitely be optimistic about what it means for net zero. We might not know what a deal would entail, but that doesn’t mean we can’t be hopeful that’ll be a good thing. Our industry’s plea to Labour is to strike while the iron is hot – learn from our new friends and make the net zero transition faster than it’s ever been before.
Christophe Williams is CEO and founder of Naked Energy