Country Product Brief Germany

Table of Content

Background information on Germany The fourth largest economy by GDP in the world is located in the center of Europe and with a population of 82 Mio. the largest and most influential European economy. As a consequence of World War II, Germany was divided into the Federal Republic of Germany and the German Democratic Republic after 1949. October 3rd 1990 is the day of German Unity and the date is a state holiday ever since. Germany is known for innovation, quality and advanced technology. Besides vehicle manufacturing, engineering and chemicals, environmental- and nanotechnology are among the most important industries in Germany.

The most popular industry for international investors in 2011 was Renewable Energy, a quarter of all projects came from photovoltaic and wind energy. A significant factor for foreign investments in Germany can also be addressed to a high quality of education as well as highly developed research institutions. II Background of Renewable Energy Systems Ltd. Renewable Energy Systems Ltd. (RES) is a subsidiary of the Renewable Energy Systems Holding Limited and the main operating company relating to wind assets.

This essay could be plagiarized. Get your custom essay
“Dirty Pretty Things” Acts of Desperation: The State of Being Desperate
128 writers

ready to help you now

Get original paper

Without paying upfront

The company’s headquarter is located in the United Kingdom and has operating offices in France, Sweden, Turkey, Southern Africa, Australia, the US and Canada. Across the globe RES is one of the leaders when it comes to developing, constructing and operating projects in relation to renewable energy. Areas of operation are on- and offshore wind energy, biomass and solar power, on site renewables as well as renewable energy consultancy. RES is constantly expanding into new markets and exploring new technology, all projects focusing on their goal to build towards a sustainable future.

III Market Opportunity for Wind Energy World wide the renewable energy industry is becoming evermore important as the rapidly growing world populations consumption of non-renewable natural resources increases. In Germany the renewable energy shares of electricity consumption has increased to 22. 9 % in 2012, therefrom wind energy holds 7. 7 %. Offshore wind energy shows the highest growth since 2009. (see Appendix 1 for detailed figures) Ernst and Young have developed indices on renewable energy, which rank countries by their attractiveness for investments in the industry.

In November 2012 Germany ranked in second place after China, leaving the US behind in third place. Most promising field is offshore wind energy (see Appendix 2 for overview of all renewable indices for the first 15 ranks). The development of wind energy technology is highly advanced and there is solid experience in using this form of technology. The German government aims to increase the share of wind power in electricity generation to 25 % by 2025. In 2012 2,439 MW, a total of 1,008 new wind energy turbines, has been added to the German grid of wind power.

This adds up to a total capacity of 31,331 MW or 22,346 wind energy turbines. (see Appendix 3) A high quality of education and human resources led to a solid expertise of planning and project development, in wind measurement, and in developing technical improvements to optimise turbines. Because the wind energy industry has a positive effect on national employment in Germany with the highest growth rate, the government will most likely support foreign investments in this field. As of June 2012 investments in new wind energy plants sum up to about 3 billion Euro resulting in a turnover of 1. billion Euro. (see Appendix 4) Furthermore a survey of TNS Infratest asked for the acceptance of renewable energies in the German population. Results show that 93 % of the Germans consider the use and development of renewable energy important to extremely important. IV Political environment Since 1949 The Federal Republic of Germany is ruled by the Basic Law, which it received from the Allied Forces Britain, the United States and France after World War II. Furthermore Germany is run by the principles of a democratic and social federal state. The Federal government consists of hree branches. Firstly the executive branch with the chief of state (current president is Joachim Gauck), the head of government (since 2005 Angela Merkel) and the Federal Ministers. Secondly the legislative branch including the Bundesrat and Bundestag. All German citizens over the age of 18 are eligible to vote the Bundestag in 4-year-periods (next election is due in autumn 2013). Lastly the Federal Constitutional Court, the Federal Court of Justice and the Federal Administrative Court represent the judicial branch. (see Appendix 5 for an overview of the German government system)

In 1952 Germany, Belgium, France, Luxembourg, Italy and the Netherlands set up the European Community, which today is the European Union and members 27 countries. Now appearing as a single market the EU has transformed into a major trading power. One of the main goals is to promote human rights. Germany as the biggest European economy plays an essential role. Currently the euro crisis weighs on Germany, as their economic strength accounts for other struggling member countries. V Economic conditions Germany is the third largest economy in the world and can register a stable position despite the difficult economic situation in the euro-area.

Germany’s 2012 GDP per capita PPP is US$39,100 with a real growth rate of 0. 7 %. For 2013 the German Federal Bank expects a real growth of 1. 7 % in GDP. Out of 144 countries Germany ranks in 6th place in the Global Competitive Index 2012-2013 and can improve its score by 0. 1 points against the past two years to 5. 5. In comparison to other innovation driven economies, Germany can withhold a solid position in all factors. Germany is a heavily export-oriented economy with main exports being cars and machinery. As of March 2013 Germany can record a trade surplus of 16. billion euro. In 2012 most important trading partners for exports were France, the United States and United Kingdom. The German labor market shows a healthy development and was able to recede by 0. 6 % in the fourth quarter of 2012 against the previous quarter. In March 2013 the unemployment rate is at 7. 3 %, which is 0. 1 percent points higher than in the previous year. VI Target Customer Profiles The energy market in Germany consists of more than 1,000 suppliers, whereas four big suppliers cover 84 % of the energy demand. The biggest suppliers were identified as: -RWE E. ON -EnBW -Vattenfall Those four companies held a market share of 59 % in 2009, but with the upcoming of new suppliers, especially in the field of renewable energy, a decrease by 4 % in market share could be identified. Since the demand for renewable energy in Germany is at a high level, it can be expected that the market will change further. Suppliers with renewable energy are likely to gain more market share in the future. VII Competitive Threats In 2012 there have been 5 big competitors present in the market for wind energy as well as other small providers.

From the newly installed capacity in 2012, the big providers hold market shares of a total of 96 %, Enercon with 54. 3 % being the biggest one followed by Vestas with 23. 1 % and REPower Systems with 10. 6 %. VIII Mode of Entry RSE is a well-established company that is experienced with operating internationally. They also have solid knowledge of wind energy technology and therefore the most recommended mode of entry is direct investment. Germany has become a number one location for greenfield-investments since 2008, therefore by investing directly RSE will enter a growing market with a high success outlook.

Additionally it will expand the German employment market, which will be a benefit for the economy and therefore it is more likely for Germany to support the investment. IX Government Regulation Investment Climate Companies that wish to do direct investments in Germany, have to obtain the Foreign Trade and Payments Act. Foreign direct investments (FDI) are generally encouraged by the government and stated restrictions are rarely enforced. If the FDI withholds a voting interest of 25 % or more, the Federal Ministry of Economics and Technology may deny investment if national security is at risk.

Law equally treats foreign owned companies that are registered in Germany as a GmbH or AG as domestic companies. The high social, political and economic stability in Germany offer best opportunities for foreign direct investments. EEG – Renewable Energy Source Act The purpose of the Erneuerbare Energien Gesetz (EEG) or Renewable Energy Source Act is encouraging investments in the emerging industry of renewable energy, to keep costs to a minimum and improve energy efficiency -Feed-in tariff: The policy of feed-in tariffs was created for the renewable energy industry and follows the purpose to accelerate investments in the field.

Producers receive a 20 year payment quarantee for their produced electricity. That encourages competition also for small and medium sized companies. Due to price regression of 1 % per year, technologies gain efficiency faster and are less costly. -The government doesn’t pay for remuneration; these rates are distributed to the consumer. Business registration If a company carries out a commercial business operation, in order to ensure transparency and a high level of business security, it has to be listed in two public registers: -Public commercial register Local trade office X Marketing Mix Product Long term it is predicted that offshore wind energy will gain the most profitability although installation and connecting costs are higher than for onshore wind energy. It is recommended for RSE to invest in offshore turbines. Germany currently has a total capacity of 675 GWh of offshore wind power turbines. This is an increase of 160 % against 2009, when the first turbines were installed offshore. Price Due to the governmental regulations in the „EEG“, there is a fixed price of 3. 5 €-cents per kWh.

For 12 years after initial operation of the offshore wind power plant there is an additional compensation of 13 €-cents per kWh. The additional compensation will decrease by 1 percentage point every year. Place The best gateway for companies operating with offshore wind energy in Germany is Hamburg. Located in the North of Germany between North and Baltic sea, Hamburg offers great infrastructure. The harbor is a major transport axes to many other regions in Europe. Some of the leading research institutions are located in Hamburg and with four big universities in the vicinity of the city, a highly educated workforce is guaranteed.

Recently Cuxhaven Steel Construction GmbH and AMBAU GmbH, both production and loading centers for offshore technology, have located in the area. This is a huge opportunity to strengthen the economic base. Promotion As wind energy is in the area of B2B, all promotion activities should be addressed carefully to the target group and contain all necessary information. RSE should be present in the public and build a relationship to the end consumer, although they are not the direct target group. Exhibiting their technology on trade fairs is also highly recommended. Appendix 1 (Source: http://www. erneuerbare-energien. e/en/unser-service/mediathek/downloads/detailview/artikel/development-of-renewable-energy-sources-in-germany-in-2011-graphics-and-tables/? tx_ttnews%5BbackPid%5D=223&cHash=78476041ff79d90440892ff11e12d60e) Appendix 2 (Source: http://www. ey. com/GL/en/Industries/Cleantech/Renewable-energy-country-attract iveness-indices_November-2012) All Renewable Index (ARI) November 2012 Appendix 3 (Source: http://www. wind-energy-market. com/fileadmin/pdf/Deutscher_Markt. pdf) Appendix 4 (Source: http://www. unendlich-viel-energie. de/en/wind/details/article/48/renewable-energies-an-economic-stimulus. html) Appendix 5 (Source: http://www. atsachen-ueber-deutschland. de/en/politisches-system. html) References Facts about Germany, Last Updated: 2013, Cited: 10/04/2013 < http://www. tatsachen-ueber-deutschland. de/en > Germany Trade & Invest, Last Updated: 2013, Cited: 10/04/2013 < http://www. gtai. de/GTAI/Navigation/EN > RES Group, Last Updated: 2013, Cited: 10/04/2013 < http://www. res-group. com/about-res/our-vision. aspx > Development of renewable energy sources in Germany in 2012, Last Updated: 29/03/2013, Cited: 10/04/2013 < www. erneuerbare-energien. de/P219-1/ > dena – German Energy Agency, Last Updated: 2013, Cited: 10/04/2013 < www. enewables-made-in-germany. com > Euro Crisis Weighs on Germany’s Economy, Lawton, C. and Sharma, T. , Last Updated: 13/11/2012, Cited: 10/04/2013 < http://online. wsj. com/article/SB10001424127887324556304578117182185635030. html > Federal Bank of Germany, Last Updated: 2013, Cited: 10/04/2013 < www. bundesbank. de > World Economic Forum, Last Updated: 2013, Cited: 10/04/2013 < http://www3. weforum. org/docs/CSI/2012-13/Germany. pdf > Trading Economics, Last Updated: 2012, Cited: 10/04/2013 < http://www. tradingeconomics. com/germany/indicators >

Statistisches Bundesamt, Last Updated: 2013, Cited: 10/04/2013 < https://www. destatis. de/EN/FactsFigures/NationalEconomyEnvironment/ForeignTrade/TradingPartners/Current. html > Wirtschaftsdienst, Last Updated: 2011, Cited: 10/04/2013 < http://www. wirtschaftsdienst. eu/archiv/jahr/2011/4/2555/? PHPSESSID=7fc7eb7165ea9d306a8e6f84aaa3f5a1 > Metropolitan Region Hamburg, Last Updated: 2013; Cited: 10/04/2013 < http://english. metropolregion. hamburg. de > Global Trade, Last Updated: 13/03/2011, Cited: 10/04/2013 < http://www. globaltrade. net/f/business/text/Germany/Investing-The-Investment-Climate-in-Germany. html >

Cite this page

Country Product Brief Germany. (2016, Sep 16). Retrieved from

Remember! This essay was written by a student

You can get a custom paper by one of our expert writers

Order custom paper Without paying upfront