(de-news.net) – German Chancellor Friedrich Merz is in the process of restoring confidence within the CDU/CSU after criticism over a cabinet reshuffle, while former head of the Chancellery Thorsten Frei takes over as parliamentary group leader of the CDU/CSU. At the same time, the government is advancing a major renewable energy reform aimed at reducing costs, strengthening market mechanisms, and aligning climate ambitions with grid capacity.
In response to growing internal criticism over his recent cabinet reshuffle, German Chancellor and CDU leader Merz has pledged to improve the way his government communicates its decisions. Following a special meeting of the CDU/CSU parliamentary group, Merz acknowledged that the coalition would have to place greater emphasis on explaining its policies and making government decisions more understandable to lawmakers and the wider public. Seeking to ease tensions that had emerged over several personnel changes, he described the internal discussions within the parliamentary group as fair, respectful, and constructive.
During the meeting, conservative lawmakers elected Frei, the former Chancellery Minister, as the new chairman of their parliamentary group. Frei secured 91.9 percent of the vote, succeeding Jens Spahn, who resigned after facing political pressure linked to his position on surrogacy. Merz’s decision to reorganize parts of the cabinet following Spahn’s departure triggered additional criticism within sections of the CDU, particularly regarding the replacement of Transport Minister Patrick Schnieder. President Frank-Walter Steinmeier subsequently presented official appointment certificates to Frei’s successor as Chancellery Minister, as well as to newly appointed Health Minister Carsten Linnemann and Chancellery Chief of Staff Nina Warken (CDU).
According to participants, 180 of the 208 CDU/CSU lawmakers attended the special session of the parliamentary group, with some members interrupting their holidays to take part in the proceedings. The meeting reportedly involved more extensive discussions than initially anticipated, reflecting the political sensitivity surrounding the recent government changes. SPD parliamentary leader Matthias Miersch expressed confidence that Frei’s election would help stabilize the situation and allow the governing coalition to return its attention to legislative priorities.
A balance between climate goals and energy costs
Meanwhile, the federal cabinet approved the proposal of Economy Minister Katherina Reiche (CDU) for a comprehensive reform of renewable energy subsidies and electricity grid connection rules. The package represents a significant adjustment to Germany’s established subsidy model under the Renewable Energy Act (EEG), with the government aiming to reduce costs, strengthen market-based mechanisms, and ensure that renewable energy expansion proceeds in parallel with available grid capacity.
Under the planned reform, newly installed small rooftop solar systems from 2027 onward would no longer receive permanent guaranteed feed-in payments. Instead, homeowners would be expected to sell surplus electricity through market-based mechanisms. Because the technical and administrative structures required for widespread direct marketing are not yet fully developed, the government plans a transitional period during which smaller installations would continue to receive temporary but reduced payments.
The reform also seeks to address increasing tensions between the rapid expansion of renewable energy and limitations in Germany’s electricity networks. The government argues that growing numbers of wind and solar facilities are being built in regions where grid infrastructure cannot fully absorb additional electricity production. As a result, operators are increasingly required to reduce output through so-called redispatch measures. These interventions currently generate compensation costs that are ultimately financed through electricity grid fees paid by consumers.
Under the proposed “grid package,” renewable energy operators would assume greater financial responsibility when electricity cannot be fed into the network because of capacity constraints. In certain situations, compensation payments would be reduced, while particularly congested regions could see compensation excluded entirely. The government also intends to limit the construction of additional wind facilities in areas where networks have reached capacity, requiring grid operators to strengthen infrastructure before further expansion takes place.
The planned changes would also end fixed feed-in tariffs for photovoltaic installations, replacing them with market-based sales requirements for electricity producers. Support mechanisms would be standardized, while the amount of electricity that smaller and medium-sized rooftop systems can feed into the grid would be limited. At the same time, auction volumes for biogas facilities between 2027 and 2030 would be slightly increased, and smaller plants would receive incentives to operate more flexibly and contribute to overall energy system stability. A dedicated wind power auction is also included as part of Germany’s broader climate policy framework.
Reiche argued that the EEG should evolve from a broad subsidy guarantee into a framework that encourages economically sustainable renewable expansion while placing greater responsibility on market participants and the energy system as a whole. Ahead of parliamentary deliberations, she warned against weakening the central elements of the reform, emphasizing that renewable energy growth needed to become more cost-efficient and better coordinated with grid development.
Germany’s energy sector divided over grid bottlenecks and investment
Environmental organizations, however, criticized the proposal as a potential obstacle to Germany’s energy transition. The German Environmental Aid organization (DUH) argued that the reform could introduce additional barriers for renewable energy expansion, particularly affecting private solar operators. The organization also questioned whether mandatory direct marketing would be economically viable and practically manageable for many small-scale producers. Green Party energy politician Konstantin von Notz similarly warned that the proposed measures could slow rather than accelerate the expansion of wind and solar power.
Critics also argued that the reform could shift the consequences of delayed grid expansion onto renewable energy producers. The Federal Association for Renewable Energy (BEE) maintained that operators should not be responsible for infrastructure shortcomings resulting from insufficient network development. Energy sector organizations, including the BDEW and the Association of Municipal Enterprises (VKU), adopted a more cautious position, describing the proposals as an important foundation for further discussion while calling for adjustments during the parliamentary process.
Shortly before the cabinet meeting, Environment Minister Carsten Schneider (SPD) and Economy Minister Reiche finalized the details of the reform package. Schneider said the agreement would provide a reliable framework for a new phase of renewable energy expansion and electricity grid modernization. The government continues to pursue its target of generating 80 percent of Germany’s electricity from renewable sources by 2030.
