Discover rich families and their power over the German energy transition!

Discover rich families and their power over the German energy transition!

A new international cooperation project entitled "Powering Wealth. How Rich Families Shape the Energy Transition in Germany and Mexico, c. 1870-2024" is taking shape. The Free University of Berlin, under the direction of Dr. Andrea Binder from the Otto Suhr Institute will carry out this project together with Dr. Alice Krozer from El Colegio de México and Thorsten Benner from the Global Public Policy Institute in Berlin. The aim of the project is to examine the influence of wealthy families on the energy transition in Germany and Mexico, with both countries looking back on different historical developments in energy use.

The project receives funding of 1.39 million euros from the Volkswagen Foundation as part of the “(Impacts) of Wealth” funding line. These funds aim to provide a detailed analysis of the investment strategies of High-Net-Worth Individuals (HNWIs). The influence of these people on both historical and current energy policy transformation processes will be examined.

Research methodology and objectives

A central element of the research is the development of a typology of cross-generational investment strategies, incorporating both qualitative interviews and archival sources. Historical process tracing is used to reconstruct the decision-making processes behind investments. The theoretical basis is the concept of the “energy pact”, which considers the interactions between HNWIs, state actors and the electorate.

An important aspect of the study is the question of whether the financial influences of the rich promote or slow down the energy transition. Through interdisciplinary collaboration, the project also aims to work with artists from both countries to expand the impact beyond the academic sector. The duration of the project extends until 2029.

Social contexts and challenges

The investigation of power relations in social innovations of the energy transition is of central importance. According to a study by the Institute for Ecological Economic Research (IOEW), analyzing power dynamics in different national contexts such as Germany, Poland and Great Britain is essential. The results of these studies show that the interaction between different dimensions of power and actors is crucial for understanding social innovations. It is important to observe both the changes and the reproduction of these power relations.

The energy transition aims to replace fossil and nuclear energy sources with renewable energies. Experts expect the share of renewable energies to increase to around 43 percent in 2023. But this transformation also entails risks. This could increase social inequalities, as low-income households in particular are severely affected by the changes. Around 14 percent of German households are affected by “energy poverty”.

The challenges of the energy transition are reflected not only in politics, but also in society. Suggestions to solve fuel poverty include donation programs for household appliances and better insulation measures. In addition, citizen participation is seen as necessary in order to create a fairer energy transition.

The historical context of electrification, beginning in the 1880s, also illustrates the development of new industries and a new culture. This provides an important background for understanding how the influence of wealth might affect current and future energy policies. The role of wealthy actors remains a crucial question for the coming years.

Overall, the “Powering Wealth” project offers a promising approach to shed light on the complex relationships between wealth and the energy transition and to clarify the influence that diverse actors have on social transformation processes.

For further details on the regional challenges and research into the social consequences of the energy transition, see Deutschlandfunk, and for information about power relations in the energy transition read the publication IOEW. The project itself is detailed on the site Free University of Berlin described.