EnBW Energie Baden-Wuerttemberg

Similarly to the last assessment, EnBW performs well on the expansion of low-carbon business activities. In January 2021, it launched EnBW mobility+, a wholly owned subsidiary working on the expansion of the quick-charging infrastructure in urban areas across Germany. EnBW provides access to over 150.000 charging points in Europe from renewable sources. Its SENEC subsidiary provides home storage systems for solar power plants in Germany and doubled its revenue in 2020. Another subsidiary, Netze BW, has been equipping private households, commercial enterprises and municipal properties with smart meters since 2019.

EnBW significantly improved its performance on targets compared to the last assessment. It has set absolute scope 1 and 2 emissions reduction targets of 50% by 2030 and a scope 1 and 2 emissions intensity target between 15 and 30% by 2025 both compared to 2018. Finally, EnBW reports it wants to reach carbon neutrality for scope 1 and 2 emissions by 2035. It is also on track to achieve its net-zero and scope 1 and 2 emissions targets which are almost aligned with its 1.5°C pathway. EnBW’s net-zero year is consistent with the expectations for electric utility companies having assets in advanced economies.

EnBW’s scope 1 and 2 emissions intensity is projected to reduce at an annual rate of 6% between 2021 and 2025. This reduction is not aligned with the company’s 1.5°C pathway which requires a 13% annual reduction. Furthermore, in 2020 scope 1 and 2 emissions only represent 17% of total emissions with the bulk of EnBW’s emissions – around 82% – being scope 3 emissions from upstream gas sales and combustion of natural gas sold to end-customers. EnBW should speed up its scope 1 and 2 emissions reduction and implement a scope 3 neutrality objective or it risks being even further out of alignment with its 1.5°C pathway.

EnBW invested EUR 28.9 million (USD 33 million) in research and development (R&D) for low-carbon innovations in 2020, equivalent to 1% of its total capital expenditure (CapEx), which remains far off the expectation that electric utility companies should be investing 5% of CapEx in low-carbon innovation R&D. Some of EnBW’s projects include sustainable extraction of lithium from thermal waters, the use of hydrogen in gas grids or floating platforms for offshore wind farms which can operate during storms. EnBW provided a detailed R&D breakdown per technology area, but it could improve its performance by disclosing the maturity level of these R&D technologies.

EnBW has set an absolute scope 1 and 2 emissions reductions target of 50% by 2030 and a scope 1 and 2 emissions intensity reduction target of 22.5% by 2025 both compared to 2018. It also aims to reach net-zero emissions for scope 1 and 2 emissions by 2035 and 6.5-7.5 GW of renewable capacity by 2025.

EnBW will remove 4.6 GW of coal capacity from operation by 2035 with an intermediate step of 2.5 GW by 2030. Some of its coal plants will be converted to natural gas, biogas or hydrogen. EnBW also plans to operate two offshore wind farms with 3 GW of capacity in Great Britain with BP from 2028.

In 2020, EnBW only allocated 5% of its total CapEx to electricity generation from thermal assets – mainly for the construction of a gas turbine power plant in Marbach am Neckar – while 23% was allocated to renewable energy generation and 55% to grids expansion.

Between 2015 and 2020, EnBW’s emissions intensity from power generation decreased by 12%. This is just half the rate required by its 1.5°C pathway between 2020 and 2025 due to EnBW’s high reliance on thermal assets which will still account for 50% of its capacity mix by 2025.

EnBW has improved its low-carbon transition plan and the ambition of its GHG targets. However, to realize a successful low-carbon transition , EnBW would need to accelerate the closure or conversion of its coal plants, limit new gas plants investments and develop CCUS technologies for its thermal assets.