The energy transition and digital infrastructure evolution are not new challenges, but the methods to tackle them are increasingly innovative. Germany and Europe are witnessing a surge in investment and M&A activities driven by the shift to green energy generation, with an ambitious target of 80% by 2030, and the digital transformation of Industry 4.0. This transition extends beyond private economic digitalisation to encompass healthcare and administration, necessitating significant financial investments in new technologies like artificial intelligence (AI).
The integration of these technologies into existing or retrofitted infrastructure presents exciting legal and operational challenges. The energy sector is in a dynamic phase, propelled by market incentives to enhance flexibility, sector coupling, diversification, and efficiency through digitalisation. This transformation is supported by EU regulatory frameworks, which are crucial for fostering innovation and sustainability.
In the digital infrastructure sector, opportunities abound in the consolidation of the fibre optic sector and data centre investments. The outcome of the Bundestag elections in February 2025 will significantly influence market development and investment strategies. Legal experts will need to focus on meticulous due diligence, regulatory compliance, and effective closing mechanisms to navigate these complex transactions.
Long-term investors must grapple with the indirect effects of global climate change, which are difficult to predict but have substantial impacts on the sectors. Key factors include the development of CO2 prices within the European and national emissions trading systems, which will expand in 2027 to cover emissions from buildings, industry, and road transport. Electricity prices and their medium to long-term trends are also critical considerations.
Looking ahead to 2025, the renewable energy sector, including its infrastructure, faces various challenges across the value chain—from energy generation and storage to consumption in energy-intensive industries and e-mobility. The fluctuation in renewable energy generation, leading to negative prices and price peaks on the spot market, underscores the need for flexible and controllable generation capacities. Political decisions in 2025 could set new priorities and improve grid connections for flexible loads and energy storage systems.
In the solar energy field, a significant increase of around 16 gigawatts was recorded in 2024, with further expansion expected in 2025. The focus is shifting towards ground-mounted systems and Agri-PV systems, which allow land to be used for agricultural purposes. The market for co-development structures and M&A transactions for solar development projects has stabilised, with development risks often reflected in earn-out purchase price structures or replacement obligations.
The trend towards consolidation in the German project developer market is expected to continue in 2025, with several deals in the pipeline. This consolidation could lead to more efficient project development and implementation, driving further growth in the renewable energy sector.
The implications for markets are profound. The energy transition and digital infrastructure evolution require significant capital investment, innovative technologies, and robust regulatory frameworks. As the sector adapts to these changes, new opportunities and challenges will emerge, shaping the future of energy and digital infrastructure in Germany and Europe. Investors and policymakers must remain agile and forward-thinking to navigate this complex landscape successfully.
