The German electrical and digital industry has proven itself in a difficult environment, the ZVEI reported at a press conference on January 18. In the months from January to November 2022, the industry grew by 3.7% in real terms - despite adverse circumstances such as the war in Ukraine, inflation and strained supply chains. The forecast of around four percent was met.

Nominal revenue, i.e. revenue not adjusted for currency effects, rose by twelve percent to a record high of 224 billion euros. The highest growth was recorded in electronic components (+21%). This was followed by information and communication technology, batteries, energy technology (+14% each) and automation (+12%). The number of employees recently stood at just under 895,000, up 2.3% on the previous year.

Exports reached a value of 246 billion euros (including re-exports), which corresponds to an increase of nine percent. The most important sales market was the European Union, with an export volume of 126 billion euros. "The single market is the EU's greatest asset. We need to develop it further - in terms of business and regulation," said ZVEI President Gunther Kegel. "Globalization seems to be at a crossroads. The protectionist economic policies of China and the USA pose a high risk for us. The EU must take decisive countermeasures and conclude more bilateral trade and raw materials agreements." The association is confident about the current year and expects real production to be in the black.

New electricity market design called for

The topic of the energy transition also took up a lot of space at the press conference. Wolfgang Weber, Chairman of the ZVEI Board of Directors: "After politicians had to focus primarily on the challenges of energy security and affordability last year, the design of the energy transition must become more of a focus again this year." The industry association sees two primary tasks: The grid infrastructure and at the same time its digitalization must be rapidly expanded and, in addition, the electricity market design must be further developed.

Electricity is the raw material of the energy transition, which is expected to cover over 90 percent of energy demand in 2045. The current demand for electricity is 550 TWh/a. Electrification, including around 15 million charging points and six million heat pumps, will increase electricity demand to over 700 TWh/a by 2030. By 2045, the demand for electricity will be between 1,000 and 1,200 TWh/a. According to the ZVEI, renewable energy generation capacities will have to increase at least 4.5-fold in order to meet this demand. This will also place huge demands on the electricity grid. "To be clear: our electricity grid is currently not designed for this. It is not ready for the energy transition," says Weber. "But without a strong electricity grid, there will be no climate neutrality. The future electricity grid must be converted into a climate-neutral grid." Specifically, the ZVEI is calling for intelligence to be added to the system in addition to physical expansion. Among other things, there needs to be more speed in the nationwide rollout of smart metering systems, as provided for in the Act on the Restart of the Digitization of the Energy Transition, or GNDEW for short.

The association is convinced that consistent electrification and digitalization could reduce primary energy consumption by up to 65 percent. According to the association, decentralized energy generation with storage, distribution in the district with digital grid connections, sector coupling with photovoltaics, heat pumps and e-mobility and, last but not least, the immense efficiency gains from direct electricity use will make it possible to achieve the climate targets that have been set. However, a fundamentally different electricity market design is needed to get closer to these targets. "The electricity price must be further relieved of taxes, levies and charges," explains Weber. Dynamic electricity tariffs are also important. "The future design of the electricity market must be such that consumers benefit directly from attractive prices for electricity from renewable energies."