BMW exploring other options amid threats of losing Russian gas

BMW is exploring other investment options as Russian gas could be banned, bringing the industry to a standstill. BMW is working on investing in other options like solar, geothermal, and hydrogen energy. Till 2021, BMW relied on natural gas for around 54%. Now it is working on adding solar panels to developing plans and existing plans.

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Working alongside local authorities, BMW will transport hydrogen to its plan in Leipzig, Germany. BMW’s production chief, Milan Nedeljkovic said, “Hydrogen is very well-suited to lower or even fully compensate for gas demand. Our industry accounts for around 37 percent of German natural gas consumption.” If Russia were to halt gas deliveries, all the BMW’s production could be at a standstill. It would take long to consider other options and work on them accordingly. Nedeljkovic added, “Not just BMW but the entire sector would come to a standstill.”

Furthermore, the automaker plans other things for its shift from Russian gas to reflect upon German industry. They intend to come up with a system to avoid any situation leading to sudden halt of deliveries because of ration supplied availability. A new plant in Debrecen, Hungary of BMW will also be running without the need for fossil fuels. The new plant will rely largely on solar, according to Nedelkjovic. The luxury carmaker is also looking for another option- geothermal energy.

Other options

Geothermal power is more stable than weather-dependent renewables but has not seen growth or investment comparable to wind or solar partly due to high upfront costs and complex licensing processes for drilling. Asked about the potential of nuclear energy, which accounts for around half of Hungary’s energy supply but is being phased out in Germany, Nedeljkovic said: “Nuclear energy can be a stabilizing factor, particularly in these volatile times. For our own production, we rely on regenerative energy sources.”

In April it was known that Germany speeds up investment in renewables.  It reveals the energy consumption of its carmakers, and just how reliant the country’s most important industry is on fossil fuels. Their dependence lays bare the hurdles automakers face in transforming their own energy consumption while moving the transport sector, responsible for around 30% of German energy consumption, towards electromobility.

Russia’s invasion of Ukraine and spiking gas prices have stepped up the urgency for German industry, which consumes another 30% of the country’s energy, to move away from fossil fuels, with tools like carbon offsets and renewable energy certificates no longer enough to meet the new goal of energy independence.