Commission initiates fact-checking of energy transformation progress
Federal Minister of Economics Katherina Reiche is spearheading a change in direction for Germany's energy transition, shifting the focus from simply increasing renewable capacity to prioritising overall system costs and effectiveness.
Reiche's proposed strategy involves reforming the Renewable Energy Sources Act (EEG) and adjusting expansion targets based on a "reality check" report, which will evaluate milestones in the energy transition, grid expansion, and the financial sustainability of the EEG account. The aim is to ensure that the energy transition remains affordable for the public and to avoid excessive costs due to the rapid, potentially uncoordinated expansion of renewables.
The minister has commissioned external consultancies, including the Institute of Energy Economics (EWI), to conduct a comprehensive assessment. This report, expected in September 2025 after parliament's summer recess, will analyse electricity demand forecasts, grid expansion needs, and the financial burdens of renewable subsidies.
Critics, including environmental groups and the renewables industry, fear this process could be used as a pretext to slow down the rollout of wind and solar. However, the official stance is that the adjustment is meant to ensure cost efficiency and system balance, not to undermine the transition.
Currently, there is no explicit proposal from Reiche's ministry to directly require renewable energy plant operators to contribute to grid expansion financing. The primary mechanism for financing renewables remains the EEG surcharge (pre-2022) and, more recently, federal budget injections (in 2025, €7.3 billion so far). The main focus is on reforming the EEG system to balance guaranteed payments to operators with market income and on ensuring the EEG account remains solvent—primarily through federal subsidies, not through additional levies on operators.
Industry discussions, such as the 10-point plan from the Climate Neutrality Foundation (SKN), suggest increasing the share of ground-mounted PV (which is cheaper) and implementing grid-friendly incentives, including time-variable grid fees and expanded direct marketing for smaller systems. These measures are intended to make renewables more cost-efficient and better integrated into the grid, but they are not official government policy—their adoption would depend on ministerial decisions.
A summary of key elements of Reiche's approach includes a shift in focus to overall system costs, no explicit proposal for operator contributions to grid expansion financing, potential slower renewables expansion, and assessment of grid expansion needs. Industry and experts propose structural reforms to lower costs and better integrate renewables into the grid, but these are not yet government policy.
Karsten Smid, Greenpeace expert for climate and energy, has criticised Reiche's proposals, stating they would lead to a "relapse into the fossil past" and a delay in the transformation of the energy sector. The Federal Network Agency is responsible for the reform of network charges and mentions the broadening of the financing base through the involvement of "feeders" in network costs.
In conclusion, Katherina Reiche's approach centres on a comprehensive, cost-focused assessment of the energy transition, potentially leading to slower renewables expansion and EEG reforms to control public expenditure. However, there is no clear proposal to make renewable plant operators directly contribute to grid expansion financing; instead, the focus is on federal subsidies and system-wide cost management. Proposals from industry and experts go further, advocating for structural reforms to lower costs and better integrate renewables into the grid, but these are not yet government policy.
- The Community policy focused on energy transition, as led by Federal Minister of Economics Katherina Reiche, prioritizes system costs and effectiveness over just increasing renewable capacity, prompting a possible reevaluation of employment policy related to the expansion of renewable energy sources, such as adjusting expansion targets and reforming the Renewable Energy Sources Act.
- In her strategy, Reiche has also taken into account the financial implications of the energy transition, commissioning external consultancies to analyze the financial burdens of renewable subsidies and assess the need for grid expansion, aiming to maintain affordability for the public and prevent excessive costs due to rapid renewable expansion.
- As part of the proposed adjustments, the minister has made no explicit employment policy proposal for renewable energy plant operators to contribute directly to grid expansion financing, instead focusing on system-wide cost management through federal subsidies, while also considering industry suggestions for more cost-efficient methods, including expanding direct marketing for smaller systems and implementing time-variable grid fees.
