(de-news.net) – Federal Minister for Economic Affairs Katherina Reiche (CDU) has backed her proposal to reduce certain support mechanisms and impose tighter constraints on the pace of renewable energy expansion, framing the initiative as a necessary adjustment reflecting the sector’s structural maturation. She argued that the growing dominance of renewable energy in Germany’s electricity mix required a corresponding increase in operational accountability, particularly with respect to maintaining grid stability and ensuring the efficient functioning of the overall energy system. Because renewable sources now constitute the majority of national electricity generation, Reiche maintained that they should assume a proportionally greater share of responsibility for managing the technical and economic consequences associated with system integration. In this context, the Ministry for Economic Affairs is evaluating whether compensation payments to renewable operators should be reduced or discontinued in situations where electricity cannot be injected into the grid due to insufficient transmission capacity. According to Reiche, electricity rendered unusable by such grid bottlenecks generates annual costs approaching €3 billion, a financial burden that is ultimately distributed across end consumers through higher electricity tariffs. She indicated that the continued socialization of these inefficiencies imposed growing systemic costs and argued that this compensation framework was no longer sustainable under current conditions.
These proposed measures form part of a broader package of grid-related reforms developed by the Ministry for Economic Affairs, elements of which recently entered the public domain and have since prompted significant criticism from representatives of the renewable energy sector. Industry stakeholders have characterized the reforms as potentially restrictive, alleging that they could slow future deployment and undermine investment certainty. Reiche rejected these accusations, asserting that the proposed adjustments were intended to address structural cost imbalances within the energy system rather than to impede renewable development as such. She emphasized that the central objective of her policy approach was to reduce, or at minimum prevent further escalation in, the financial burden associated with energy consumption for both households and industrial consumers. Within this framework, she underscored the importance of ensuring a more equitable distribution of system-related costs among different market participants, arguing that maintaining affordability and economic stability required a reassessment of existing compensation arrangements. Reiche further cautioned that claims portraying the reforms as deliberate obstruction misrepresented their purpose and risked obscuring the broader objective of enhancing systemic efficiency and cost sustainability.
Germany weighs structural energy reforms
The timing of the proposed reforms coincides with a period of slower-than-anticipated expansion in renewable generation capacity, particularly in the wind and solar sectors. Deployment levels recorded in the previous year fell short of the targets established under the Renewable Energy Sources Act (EEG), which sets legally defined expansion benchmarks intended to support Germany’s long-term energy transition. Under current statutory provisions, annual additions of onshore and offshore wind capacity are scheduled to reach 7.8 gigawatts beginning in 2025, while solar photovoltaic expansion is expected to increase to 22 gigawatts annually starting in 2026. The recent shortfall highlights the sensitivity of renewable deployment to regulatory and financial incentives, a dynamic previously demonstrated in the period following the reduction of feed-in tariffs after 2012. Those earlier policy adjustments contributed to a temporary slowdown in installation activity, illustrating the extent to which investment momentum in renewable energy remains closely linked to policy design and market incentives.
In parallel with these structural reforms, Reiche announced plans to introduce a dedicated crisis preparedness instrument aimed at safeguarding Germany’s gas supply in the event of exceptional disruptions, with implementation under consideration for the winter of 2027. She indicated that the ministry was conducting a comprehensive evaluation of potential mechanisms, including reserve-based approaches designed to provide additional supply security under extraordinary conditions. At the same time, she emphasized the importance of clearly distinguishing between routine market fluctuations and exceptional crisis scenarios, such as supply interruptions resulting from sabotage or other external shocks. According to Reiche, conflating normal market developments with extraordinary emergency risks could lead to distorted policy responses and undermine effective crisis planning. She also stressed that, in the near term, Germany’s gas supply remained secure, noting that sufficient storage capacity had already been contracted and that diversified import routes provided additional resilience. These factors, she concluded, ensured that supply security would be maintained throughout the upcoming winter season while longer-term contingency mechanisms were developed.
