Headlines | News Germany’s transition will continue


Germany Climate control Germany’s prospective coalition government has agreed to continue the country’s landmark energy transition without major adjustments and stick to existing climate targets, reports Clean Energy Wire. Faced with economic stagnation and the geopolitical shake-up after the US election, the coalition parties – the conservative CDU/CSU alliance under chancellor-in-waiting Friedrich Merz and the Social Democratic Party – have put more emphasis on economic competitiveness than climate action. The energy industry has praised the continuation of existing policy, while environmental NGOs showed relief over the treaty’s climate commitments, both on a domestic and the EU level.


In their highly anticipated coalition treaty,


agreed after weeks of negotiations, the conservative CDU/CSU alliance of likely future chancellor Friedrich Merz and the Social Democratic Party (SDP) said they will carry on rolling out renewables and stick to the country’s target to be climate neutral by 2045. The coalition partners also said they would continue to support schemes to make industry, building, transport and other sectors more climate-friendly. However, following two years of economic stagnation and recent geopolitical upheavals, boosting the growth of Europe’s largest economy – for example, via energy price cuts – by showing slightly less climate ambition than the outgoing government of the SPD and the Greens has been given priority. While the business community welcomed the emphasis on competitiveness, cost


reductions and the continuation of climate policy, climate activists said they were relieved that the future government remains committed to climate targets.


“It is a good sign that the coalition is not making a U-turn on the energy transition, but is instead promoting the continuation of energy policy and an innovation-driven course for Germany,” said the head of utility association BDEW, Kerstin Andreae. “The coalition agreement is a basis for the efficient continuation of the energy transition – cost and system efficiency must be the guiding principles in future.”


The new government looks set to be sworn in around early May, after both the SPD’s members and the CDU’s party delegates have approved the coalition treaty.


Construction of Hornsea 4 on hold UK Wind power


Ørsted has decided to discontinue the Hornsea 4 project in the UK in its current form. Since the Contract for Difference award in the UK’s allocation round 6 in 2024, the 2400 MW project ‘has seen several adverse developments’, says Ørsted, related to the continued increase of supply chain costs, higher interest rates, and an increase in the risk to construct and operate Hornsea 4 on the planned timeline for a project of this scale. In combination, these developments


have increased the execution risk and deteriorated the value creation of the project. Ørsted has therefore taken the decision to stop further spend on the project at this time and terminate the project’s supply chain contracts, meaning that Ørsted will not deliver Hornsea 4 under the CfD


awarded in Allocation Round 6. Ørsted intends to evaluate options for


future development of the Hornsea 4 project given the existing and continuing seabed rights, grid connection agreement and Development Consent Order. Rasmus Errboe, group president and CEO of Ørsted, said: ”We remain fully committed to being an important partner to the UK government to help them achieve their ambitious target for offshore wind build-out … [but] we’ve decided to discontinue the development of the Hornsea 4 project in its current form, well ahead of the planned Final Investment Decision [expected] later this year.” “We’ll keep the project rights for the Hornsea 4 project in our development portfolio, and we’ll seek to develop the project later in a way that is more value-


Hornsea 2 wind farm


creating for us and our shareholders.” As a consequence, Ørsted expects to incur break- away costs of DKK 3.5 to 4.5 bn in 2025. Sue Ferns, senior deputy general


secretary of energy union Prospect, commented: “Ørsted halting work on Hornsea 4 highlights how tight the margins are on a lot of offshore wind projects.”


‘AI’s economic gains outweigh carbon cost’ – IMF


Worldwide Artificial intelligence Economic gains from artificial intelligence will boost global output by around 0.5% a year between 2025 and 2030, outweighing the costs of rising carbon emissions by the data centres needed to run AI models, the International Monetary Fund has announced in a new study released on 22 April at its annual spring meeting in Washington.


It estimated that AI-driven global electricity needs could more than triple to around 1500 TWh by 2030.


The report highlights that AI could add 0.5% points to annual global GDP growth, and the resulting build-up of AI-driven carbon emissions is ‘worrisome’. But that AI could help


emissions fall if applied well, say some experts. Despite challenges related to higher electricity prices and greenhouse gas emissions, the gains to global GDP from AI are likely to outweigh the cost of the additional emissions, said the report, but it noted that those output gains would not be shared equally across the world, and called on policymakers to minimise costs to broader society. As an example the IMF report noted that the space dedicated to server-filled warehouses in northern Virginia, which has the world’s largest concentration of data centres, was already roughly equivalent to the floor space of eight Empire State Buildings.


It is estimated that AI-driven global electricity needs could more than triple to around 1500


TWh by 2030 – about the same as India’s current electricity consumption and 1.5 times higher than expected demand from electric vehicles over the same period. The carbon footprint of that rise will in part depend on whether tech firms can keep promises to slash emissions from data centres by increased use of renewables and other means. The IMF estimates that strong takeup of AI would, under current energy policies, mean a global cumulative increase of greenhouse gas emissions of 1.2%, between 2025 and 2030. Greener energy policies could limit that increase to 1.3 gigatonnes, it estimated. Read the Report: “Power Hungry: How AI Will Drive Energy Demand“ via the IMF website.


www.modernpowersystems.com | May 2025 | 9


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