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A trendsetter for 20 years: the German Energy Solutions Initiative
Introduction
A resolution passed by the German Bundestag on February 20, 2002, gave the go-ahead for a new form of foreign trade promotion: the "Federal Initiative Renewable Energies Worldwide - Global Renewable Network".
Publisher:
German Energy Solutions Initiative
Three goals were named at the time: Climate protection, promotion of foreign trade and dovetailing of foreign trade promotion with development cooperation. The focus was on small and medium-sized enterprises (SMEs) in the renewable energy sector.
"Back then, there were no export initiatives for specific industries," recalls Christina Wittek, who took over responsibility for the initiative at the Federal Ministry of Economics in January 2004. "Until then, there had only been general export promotion, in particular trade fairs, information events, and information and contact events." At the latter, potential business partners from a wide range of industries met in a hotel lobby in the target market; business contacts or even successes tended to be coincidental.
The German Energy Solutions Initiative was to offer more specific support for its sector. The first step was to design a special trade fair program and a dedicated trade fair stand. It was already used at 13 trade fairs in 2003, attracting a great deal of attention abroad. At that time, renewable energy was not yet very well known.
Energy Trade Missions
The implementation of targeted business contacts seemed more difficult. But at the end of January 2004, the Association of German Chambers of Industry and Commerce (DIHK) came up with a targeted proposal modeled on the EU’s Gateway to Japan support program: business trips (called energy trade missions) with the support of Chambers of Commerce abroad (AHKs). This program was – and still is – based on sound information about the target market and individual on-site B2B meetings tailored to each individual company. It is the most important pillar of the export initiative. Currently, a promotion factor of 1:20 applies here; i.e., 1 euro of promotion generates 20 euros of sales for the participating companies!
Reference projects
One of the Bundestag’s demands was demonstration projects abroad. Itself still in its infancy, the German Energy Agency (dena) submitted a proposal for a "solar roof program" in 2004. It was to support SMEs in setting up solar arrays on German schools, on German embassies and consulates abroad. The support consisted in particular – as it still does today – in advising SMEs, accompanying them to the target country, and providing financial support for marketing, which included training local workers.
One aspect hampered project visibility: the panels on the roofs were hard to see! Eye-catching displays were therefore put up to show in real time how much clean electricity the solar array was generating. The program was also expanded to include properties with a clear connection to Germany, such as the Haribo plant.
The program was later expanded to include all renewables; it now goes by the name Renewable Energy Solutions Program (RES program for short). Everything from biogas to geothermal energy, wind power, small hydropower and – increasingly – hydrogen is included. Also, the project no longer needed to be associated with a building connected with Germany; technologies "made in Germany" sufficed. "We had asked ourselves: why actually only solar technology? Demonstration projects and good marketing abroad were also important for other industries," says Wittek.
Today, projects that are innovative technologically, financially or in terms of marketing, are promoted.
The Project Development Programme
For a long time, it was unclear how foreign trade promotion and development cooperation could be interlinked. Discussions were held with dena and the Gesellschaft für internationale Zusammenarbeit (GIZ). "In the end," says Christina Wittek, “the GIZ was crucial for implementation in these countries, where there were hardly any chambers of commerce at the time to organize business trips. GIZ called it the Project Development Program (PEP). The focus was and still is on select emerging and developing countries in Africa and Asia. The first – and very successful – PEP business trip took place in 2007 in Senegal.
But it was not until 2017 that the Project Development Program lived up to its name. Since then, GIZ has identified and contacted foreign commercial and industrial companies that want to make their energy supply more reliable and affordable. If there is interest, the PEP team clarifies the technical, legal and financial options for a climate-friendly energy supply with the owners on-site and pre-develops the project on this basis. GIZ then proposes German companies for implementation. "The projects implemented save considerable amounts of CO2, and the investments triggered by the PEP have a factor of 1:51; i.e., 1 funding euro generates 51 euros of investment!" says Christina Wittek.
Thinking holistically
In 2007, the Energy Efficiency Export Initiative was founded to accompany the Renewable Energy Export Initiative. Increasingly, however, the separation proved difficult: Is a solar-powered heat pump, for example, renewable energy or energy efficiency?
Thus, renewables and energy efficiency merged in one export initiative in 2015; it has since been called simply the German Energy Solutions Initiative. It now covers even smart grids, storage, hydrogen and fuel cells.
To take account of the increasing complexity of energy solutions, the Initiative now provides targeted support for small and medium-sized enterprises in forming consortia and other mergers. A facilitator accompanies the process, and the consortium presents a joint product at a conference. The reason for the consortium project is that consortia have competitive advantages with a package solution compared to individual component suppliers. Currently, the largest project is a green methanol plant in Tunisia, for which six companies have joined forces.
Structural challenges
Only in 2010 was a central office opened to coordinate the numerous funding offers and measures. It forms a hub between the Ministry of Economic Affairs and Climate Action, the DIHK, the participating AHKs, the implementing consultants, dena and GIZ. The office initially had a staff of two and now has 10 employees; it has improved the export initiative qualitatively and quantitatively. In addition to the extensive coordination tasks, there is a comprehensive website with around 300 publications annually ranging from target market analyses, financing fact sheets, sector analyses, basic information and much more - important information that companies need in the run-up to an export transaction.
The initiative today
The success of the German Energy Solutions Initiative is measured by far more than just the sales that companies post after participating in events. The Initiative also provides valuable contacts in the industry and prevents small companies in particular from having to conduct time-consuming business development research. "We have always responded flexibly to changes in markets and technological developments. I assume that the export initiative will be needed for at least another decade," says Wittek.
For two decades now, the German Energy Solutions Initiative has been promoting the spread of climate-friendly energy technology worldwide. In the future, it will do so on behalf of the ministry, which now also has the word "climate" in its name.