In a quiet year, Germany transfers around 70 to 80 billion euros abroad to buy coal, oil and gas. In the crisis year 2022 it was 137 billion. That money does not come back; it forms capital in Norway, Texas and Kazakhstan. And it falls due again next year, and the year after, without end.
The obvious question is: what would it cost to end that – to build an energy system whose fuel is wind and sun, that uses batteries for hours and hydrogen for weeks, and that in the end knows only electricity and hydrogen? And how does that investment compare with the annual bill it makes redundant?
I have done that calculation, over forty years, year by year, with all assumptions laid open. The result surprised me at two points, and both surprises are worth writing down honestly.
The investment: 1.45 trillion euros by 2045
What is counted is the energy system itself – generation, grids, storage, hydrogen. Not the end-use equipment: heat pumps, electric cars and industrial furnaces are replaced anyway when the old unit fails, in both worlds, just with different technology.
For gross electricity consumption of around 1,100 terawatt hours in 2045 – today it is just over 500 – Germany needs roughly 400 gigawatts of photovoltaics, 160 gigawatts of onshore wind and 70 gigawatts offshore. At today's market prices that is around 530 billion euros of new build, 630 to 680 including replacement of plants that reach the end of their life along the way.
The grids cost about as much: roughly 330 billion for the transmission grid and another 300 to 320 for distribution grids, according to the IMK study based on the grid development plan. Add the hydrogen core network at around 20 billion – comparatively cheap, because 60 per cent of its 9,000 kilometres are repurposed natural gas pipelines.
Storage and flexibility: 150 gigawatt hours of batteries for the hours, 20 gigawatts of hydrogen-ready power plants for the dark lulls, 40 to 50 terawatt hours of hydrogen caverns for the winter. Together 70 to 80 billion. And hydrogen production itself, 40 gigawatts of electrolysis plus import terminals, 60 to 75 billion.
In total: 1.4 to 1.5 trillion euros over twenty years, around 72 billion a year. The large studies that count everything – buildings, vehicles, industrial plants – arrive at 5 to 11 trillion; their energy-system share alone is 0.9 to 1.6 trillion. My own calculation lands in that corridor.
The first surprise: free fuel is an illusion
The simple calculation goes like this: 1.45 trillion once, against 75 billion every year, makes a 20-year payback. After that the electricity is free.
That is not true, for a reason that is easy to overlook. Wind and sun cost nothing. But the capital stock that captures them costs maintenance every year – 2.5 per cent of the asset base, eventually around 36 billion annually. And it does not last forever: photovoltaics 25 years, wind turbines 20 to 25, batteries 15, electrolysers 20. From 2046 the first generation has to be replaced, another 30 to 45 billion a year. On top of that, a residual fuel import remains, because Germany will not produce all of its own hydrogen – around 12 billion annually.
Add it all up and the renewable system costs around 90 billion euros a year in steady state.
The comparison is only fair if the fossil system receives the same treatment. Gas grids, power plants, refineries and tank farms also need to be operated, maintained and renewed – around 15 billion in operations and 18 billion in upkeep a year. With 75 billion in imports that comes, without a carbon price, to around 108 billion.
So the renewable system is ahead in steady state, by about 18 billion a year. But the gap is smaller than the intuition of free fuel suggests: the renewable system largely replaces fuel costs with capital costs. Anyone who believes the energy transition pays for itself simply through the disappearing fuel bill has not finished the calculation.
The second surprise: where the advantage really comes from
If fuel alone does not make the difference, what does? Three things, none of which appears in the simple calculation.
The carbon price. The European emissions trading system is law. It has applied to power plants and industry since 2005 and will apply to buildings and transport from 2027. At 100 euros per tonne from 2030 and 500 million tonnes of fossil emissions, that is 50 billion a year the fossil system carries in addition – rising, because the volume of allowances shrinks. By 2050, following the system's own logic, it is 90 billion a year. The renewable system does not pay it.
The crisis years. Since 2005 the fossil world market has delivered a shock every seven or eight years: the financial crisis, Fukushima, Ukraine, now Iran. A crisis year costs 60 billion more than a normal one. A system without fuel imports does not know such years. The calculation assumes one every eight years – that is experience, not pessimism.
The residual value. After forty years the renewable system is still standing: the grids are half depreciated, the second generation of plants is a few years old. Residual value around 660 billion. The fossil system has merely been maintained over the same period; at the end it has no comparable value that anyone owns.
The result over forty years
With a carbon price and one crisis year per decade, the calculation looks like this:
Until around 2040 the renewable path is more expensive. For twenty years we pay the investment and the still-running imports at the same time. The gap is widest around 2035: roughly 50 billion a year more than on the fossil path. That is the price of the transition, and it is real.
From 2045 the picture turns. The renewable system costs 90 billion a year, the fossil one 190 to 255 – depending on whether a crisis year falls in between. Cumulative costs break even in 2048. Over forty years the overhaul saves 1.8 trillion euros, around 2.4 trillion including residual value.
And without a carbon price? Then there is no break-even within forty years. The fossil path is 220 billion ahead cumulatively; counting residual value, the renewable path is 440 billion ahead – over forty years, that is a draw. That is not an ideological statement but the result of the arithmetic – and it is worth saying out loud: the overhaul pays clearly only if emissions have a price. Without one, it costs about the same over forty years as carrying on – with the difference that it knows no crisis years, keeps value creation in the country and hands no one in Washington, Moscow or Doha a lever. Whether that is worth the overhaul is then a political decision. With a carbon price it is both.
How sensitive the calculation is
Every calculation of this kind hangs on assumptions, and these are explicitly orders of magnitude, not a costing. Hence the cross-check:
If the investment comes in 30 per cent higher – interest rates, supply chains, permitting backlogs – break-even slips to 2055 and the advantage shrinks to just under 800 billion. If it comes in 20 per cent lower, because photovoltaics and batteries keep falling as they did over the last decade, break-even is 2046 and the advantage 2.4 trillion. If operating costs rise to 4 per cent, it takes until 2052. If the crisis years do not materialise, break-even shifts by two years – the crises matter, but they are not decisive. The import price is: at 55 billion a year instead of 75, break-even is 2051; at 95 billion, 2047.
And the worst case – investment 30 per cent higher, operating costs 4 per cent, no carbon price, no crises – leaves the renewable path 2.3 trillion behind the fossil one over forty years. One should know that this case exists. One should also know what it requires: that the costs of the overhaul explode while fossil prices stay calm for forty years and Europe abolishes emissions trading. All three at once.
What follows
The fast business case that many thought possible does not exist. What exists is a solid one: around 22 years to break-even, then a system that costs half as much as the alternative and is still worth something at the end.
The comparison is therefore not "investment versus import". It is "build once versus rent forever". And we have now been renting for fifty years, at prices set by others.
The hardest number is not in this calculation. It is the roughly 50 billion a year of additional cost in the transition phase around 2035. Who carries it – the state, consumers, industry, the capital market – decides whether the overhaul happens. Not whether it pays. It does.
My question to you: which assumption in this calculation do you consider the weakest – investment costs, the carbon price, the frequency of crises or operating costs? I am happy to recalculate.
Assumptions and sources
Path A, fossil continued: 75 billion imports a year in quiet years (Federal Statistical Office: 2024 natural gas 19, crude oil 45–51, hard coal 5; Bloss/study on net imports 2021–2024), a crisis year every eight years at 135 billion (2022: 137). 18 billion a year in upkeep investment and 15 billion in running costs for fossil infrastructure (gas grid, power plants, refineries, tank farms, storage). Carbon price 60 euros today, 100 from 2030, 150 from 2040, 200 from 2050 on 500 Mt of fossil emissions, slightly declining.
Path B, renewable: 1,450 billion investment 2026–2045 with ramp-up (generation 630–680, grids 650–670 per IMK/Hans Böckler Foundation December 2024, storage 70–80, hydrogen 60–75). Operating costs 2.5 per cent of the asset base. Replacement at end of life: generation 22 years, batteries 15, electrolysis 20, power plants 30, grids 45. Fossil imports decline linearly to one tenth by 2045; from 2035, 12 billion a year of hydrogen imports. Costs per gigawatt at 2025 market prices: PV 0.7 billion, onshore wind 1.6, offshore wind 3.0, batteries 250–300 euros per kWh, electrolysis 1.2–1.5 billion, hydrogen-ready power plant 1 billion.
Comparative studies: McKinsey "Net-Zero Deutschland" 2021 (6 trillion, of which 1 trillion additional); KfW Research 2022 (5 trillion); Agora/Bertelsmann 2025 (11.3 trillion); PwC 2024 (total system costs renewable ≈ fossil). Gross electricity consumption 2045: grid development plan, 1,080–1,300 TWh. Hydrogen core network: FNB Gas / Federal Network Agency. Caverns: DVGW short study; RWE Gronau-Epe.
All expansion figures are scenario values. Costs per gigawatt vary by ±30 per cent. The full model with all annual values is available on request.
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