The luxury car maker Mercedes Benz is signing up with an energy company. This follows the initial announcement that the automaker plans to build a wind farm at its Papenburg test track in northern Germany. The company is tapping the huge wind park in the Baltic Sea starting in 2027.
CEO Ola Kallenius said, “Those two projects alone, in the mid to long term, will cover 40% of our electricity needs. There’s a lot of activity to deal with this short to mid-term challenge.” European carmakers could see output drop by more than 1 million vehicles per quarter starting late in 2022 and continuing through 2023, as soaring energy costs weigh on the supply chain, S&P Global Mobility said in a report earlier in October. Parts shortages and supply bottlenecks are likely to weigh most heavily on automakers from November through the spring of next year, particularly if energy is cut during the colder winter months, an S&P analyst said.
Mercedes has been stockpiling parts that it makes using natural gas in an effort to keep production going for several weeks even if Germany introduces drastic fuel rationing in the coming months. Russia has effectively halted gas flows in response to the continent’s support for Ukraine, leaving Europe’s powerhouse economy looking to fill storage sites and find alternative supplies before winter.
Amidst energy crisis
“I like to believe that we will get over this energy crisis situation in the next couple or three years,” Kallenius told. “If you look at some of those wind projects I mentioned, if you take just the cent per kilowatt-hour that it costs to produce, that is actually some of the cheapest energy that you can have in the world. For the mid to long term, I’m quite optimistic about this.”
While neither of the two projects is currently operational, they aid in Mercedes’ overarching goal. By 2030, Mercedes aims to have 70% of its energy from renewable sources. But the company faces another problem. Even once complete, these two projects will not produce nearly enough to meet their goal.
This is where the German government is stepping in to help. The German government backs a significant part of renewables currently being constructed in Germany per the recently passed “German Renewable Energy Sources Act of 2023” (EEG 2023). This recently passed law follows a long string of similarly named Acts seeking to expand the European country’s renewables sector while also phasing out their reliance on fossil fuel sources. The EEG 2023 sets forth several critical changes and continues Germany’s dedication to wind and solar power generation.