In a year beset by devastating floods and record heat waves, the need to speed up the energy transition has been brought into sharp focus. The German state of Saxony-Anhalt is playing its part to address this fundamental challenge. 

In 2019, 61.5% of Saxony-Anhalt’s electricity was generated by renewable energy sources, exceeding the German average of 46.1%, according to local government data. While challenges remain along its path to phase out coal by 2038, particularly in southern Saxony-Anhalt which has a history of lignite-based energy, the private sector is working on a broad range of solutions.

Clusters of local and multinational companies with production and research facilities across the state operate in areas ranging from solar energy and e-mobility to green hydrogen and the bioeconomy. This array of businesses working in related fields has created an attractive ecosystem for the development of clean technologies, including batteries and fuel cells.

“Saxony-Anhalt offers a lot of potential for innovative tech firms and industrial enterprises,” says Daniel Hannemann, the managing director of Tesvolt, a manufacturer of battery storage systems based in the city of Lutherstadt Wittenberg. 

Buoyed by €4.8bn of funding from the German federal government to restructure itself in line with the energy transition, Saxony-Anhalt is investing to support business and research working towards a low-carbon future.

Renewable credentials

Saxony-Anhalt is Germany’s eighth-largest federal state by area and is home to a population of 2.2 million people. Thanks to its flat topography, as well as natural abundance of water, wind and sunlight, the state has suitable conditions for green energy developments.

“Saxony-Anhalt combines a number of unique aspects that make it an ideal location for renewable energy generation,” says Moritz Kühnel, head of H2 Technologies at the Fraunhofer Institute for Microstructure of Materials and Systems (IMWS).

While wind energy contributes the largest share to Saxony-Anhalt’s electricity generation, owing to 5.25 gigawatts of installed capacity across the state, photovoltaics (PV) are playing an increasingly important role.

In the Solar Valley, a PV-focused industrial area in Bitterfeld-Wolfen, several foreign companies have set up production and research facilities to meet growing PV demand in Germany and beyond. 

In May 2021, Switzerland-based mechanical engineering firm Meyer Burger opened its new solar cell plant in Thalheim, as part of its push to bolster European manufacturing capacity. 

“The fact that the solar industry in Saxony-Anhalt is picking up is no coincidence,” says Meyer Burger’s CEO Gunter Erfurt. “The state has actively ensured that business and science are closely interlinked and that targeted investments are made in future technologies.”

South Korea-based solar cell manufacturer Q Cells is another company expanding in the German state. The company plans to invest €125m over three years by 2023 into research and development (R&D) at its site in Thalheim’s Solar Valley. 

Upon announcing the investment, Q Cells’ chief technology officer Daniel Jeong, said: “Photovoltaic technology will be the key pillar of the energy turnaround in Germany, Europe and throughout the world — not only as a direct supplier of electricity, but also as a provider of clean energy for the green hydrogen economy.”

Green hydrogen 

Being home to one of the largest chemical clusters in Europe, Saxony-Anhalt has decades of experience in the production, storage and use of grey hydrogen, which is produced using natural gas. Now, as part of a push to reduce carbon emissions across industries, the state is building on this expertise to produce green hydrogen.

“Saxony-Anhalt is already a hydrogen region and has the know-how to deal with it technology-wise,” says Stefan Bergander, the programme director of Hypos, a research network promoting the development of a hydrogen network in Central Germany. “We only need to change the source of the hydrogen from gas to electricity,” he adds.

This is reflected by state-wide initiatives. In the town of Staßfurt, plans are afoot to produce green hydrogen using electricity from a local wind farm. Meanwhile, at the Leuna chemical complex, industrial gases and engineering multinational Linde is building the world’s largest proton-exchange membrane electrolyser plant to produce green hydrogen. 

The 24-megawatt electrolyser will produce enough fuel for approximately 600 hydrogen-powered buses, saving an estimated 40,000 tonnes of tailpipe carbon emissions per year. The plant is due to start production in the second half of 2022.

Mr Kühnel notes that an existing hydrogen supply and demand value chain in Saxony-Anhalt makes it much easier to transition to new ways of supplying and using hydrogen without starting from scratch.

“The hydrogen economy in Saxony-Anhalt is not a game or a greenwashing event, but it’s a serious business opportunity,” he explains. 

Combating Covid-19

Elsewhere in Saxony-Anhalt, locally-based companies have helped in the fight against Covid-19, playing a role in the production and distribution of vaccines.

IDT Biologika, a contract manufacturer of vaccines and active ingredients, has partnered with pharmaceutical giants AstraZeneca and Johnson & Johnson to fill vials with their Covid-19 vaccine. To meet demand, IDT is investing €100m into a second filling line and a new multifunctional vaccine production building at their site in Biopharmapark Dessau.

Jürgen Betzing, the CEO of IDT Biologika, says that the new building is on schedule to be completed in the first quarter of 2023 and will bring a tenfold increase to the company’s production capacity for active pharmaceutical ingredients.

“We can then produce active ingredients for two million to five million vaccination doses per week,” he added. From the beginning of 2023, the Dessau-based company will produce the active ingredient for the AstraZeneca vaccine, and is working in parallel with the German Center for Infection Research to develop its own Covid-19 vaccine.

Mr Betzing says that Saxony-Anhalt is a great location for modern business and science, highlighting that IDT closely cooperates with local universities, scientific and research institutions. Saxony-Anhalt is home to 29 business-oriented research institutes, which foster knowledge and collaboration between companies and academia. 

“Due to the clusters and the close interlinking of companies and research institutes, investors can easily connect to potential business partners,” says Thomas Einsfelder, managing director of Invest and Marketing Corporation Saxony-Anhalt, the state’s economic development agency.

In association with the Investment and Marketing Corporation Saxony-Anhalt. Writing and editing were carried out independently by fDi Intelligence.

This article first appeared in the October/November print edition of fDi Intelligence.