By Dr. Tobias Larisch and Dr. Jana Dammann de Chapto

The energy and infrastructure sectors continue to experience transformative changes at a high pace, a trend that Latham expects to sustain momentum for the foreseeable future.

Energy Sector

The global mega-trend of decarbonization had repercussions in Germany in 2020, most prominently displayed by the “Coal Exit”. In July 2020, the German federal government passed legislation to end coal-fired power generation in Germany by 2038, and a decommissioning schedule for individual lignite power plants was agreed. For utilities, the legislation entailed challenging negotiations with the German federal government to reach agreement on the terms of this phase-out (previously covered in this Latham post). The Coal Exit will likely continue to accelerate the energy transition, with an ever-increasing share of renewables in the overall energy mix.

In 2020, hydrogen became the energy buzzword given its potentially key role in the global push to produce carbon-free energy. A wholesale shift to clean hydrogen could remove carbon from the electricity system, which is currently responsible for around a quarter of the world’s annual 33 gigatonnes of carbon dioxide emissions. A hydrogen shift could also help clean up transport and heavy industry, which account for the bulk of other global emissions. However, the opportunities around hydrogen would also require coordinated policy, lower hydrogen production costs, and massive growth of renewable energy source.