In 2023, renewable energies in Germany reached a new record high. They produced a total of around 260 terawatt hours (TWh) of electricity, which is about 7.2% more than the previous year. They covered more than half of the electricity consumption for the first time, a significant step towards the energy transition.

Onshore wind power plants increased by 13.4% to 113.5 billion kilowatt hours in 2023, while photovoltaic systems increased by 4.5% to 62 billion kilowatt hours. This marks new record highs for both technologies.

Decline in coal and nuclear energy production. In contrast, production from lignite and hard coal decreased significantly. Lignite decreased by 27%, while hard coal declined by 35%. Nuclear energy only played a marginal role with 1 billion kilowatt hours.

Photovoltaic is booming. In 2023, the expansion of generation capacities was particularly strong in photovoltaics. With 14 gigawatts, the expansion was in the double digits for the first time and exceeded the German government’s climate protection target significantly.

Decrease in electricity consumption. Electricity consumption in Germany decreased by 11% in 2023, positively impacting the renewable energy quota, as the quota is measured as a percentage of electricity consumption.

Onshore wind power leads the way. In 2023, Germany produced a total of 508 billion kilowatt hours of electricity, which is almost 11% less than the previous year. Renewable energies accounted for 267 billion kilowatt hours, surpassing all other forms of electricity generation.

Onshore wind power contributed the most to renewable electricity generation with 113.5 billion kilowatt hours, an increase of 13.4% compared to the previous year. Photovoltaic systems increased by 4.5% to 62 billion kilowatt hours, and biomass (including the biogenic portion of municipal waste) delivered 49.7 billion kilowatt hours, slightly more than the previous year.

Offshore wind energy did not see an increase compared to the previous year, with 23 billion kilowatt hours generated. Hydropower plants delivered 18.7 billion kilowatt hours, an 8.1% increase.

Batteries: Reserves for the energy transition. Renewable energies are clean and climate-friendly, but they have one disadvantage: they are not always available when we need them. Wind does not always blow and the sun does not always shine. This is why batteries are so important for the energy transition. They can store electricity from renewable sources and release it when needed.

Boom in batteries. The expansion of battery storage in Germany has significantly increased in recent years. In 2023, the installed capacity doubled from 4.4 gigawatts to 7.6 gigawatts, equivalent to a capacity of 11.2 gigawatt hours. The majority of new battery storage systems were installed in private households, as more and more people want to store their own solar power and become more independent from energy suppliers.

Pumped storage plants as a supplement. In addition to batteries, there are other ways to store electricity from renewable sources. Pumped storage plants pump water into a reservoir when there is an excess of electricity from renewable sources. This water is then released to generate electricity when needed.

The capacity of German pumped storage plants is around 6 gigawatts, making them the most important form of electricity storage in Germany.

The future of energy storage: The power players of the energy transition. The following companies are active in various areas of energy storage, including batteries, pumped storage power plants, and other technologies. They offer a variety of products and services, including batteries for electric vehicles, stationary storage systems for commercial and industrial use, and pumped storage power plants for electricity generation and storage.

Batteries: Tesla (NASDAQ: TSLA), BYD (HKEX: 1211), LG Energy Solution (KRX: 352810), Panasonic (TYO: 6752), Northvolt (STO: NOVS), Svolt Energy Technology (HKEX: 300788)

Pumped storage power plants: RWE (ETR: RWE), EON (ETR: EON), Vattenfall (OMXS30: VATTEN), EDP (XETRA: EDPR)

Other technologies: Energy Vault (NYSE: GWHR), Fluence Energy (NYSE: FLNC), SolarEdge (NASDAQ: SEDG), Enphase Energy (NASDAQ: ENPH), Sunrun (NASDAQ: RUN)

The market for energy storage is growing rapidly, driven by the increasing expansion of renewable energies, which have fluctuating electricity generation. Energy storage is therefore necessary to stabilize the electricity supply and increase the share of renewable energies in the power mix. The expansion of battery storage will continue to increase in the coming years.