Germany has been pouring billions into its energy transition for years, yet key targets remain out of reach. According to McKinsey’s calculations, additional costs of up to one trillion euros could be incurred over the next decade. At the same time, nine of the 15 metrics analyzed are at risk of falling off track—specifically regarding climate protection, security of supply, and cost-efficiency. The balance between financial expenditure and actual goal achievement is therefore a matter of particular concern. Consumers, businesses, and taxpayers are funding an increasingly expensive transformation, while fundamental problems remain unresolved.
Energy Transition: Billions Flow, Yet Targets Remain Unmet
A lack of funds is hardly the reason for the sluggish progress. According to McKinsey, the German electricity system alone now incurs annual costs of around 90 billion euros. In addition, approximately 25 billion euros in public funds currently flow into renewable energy and subsidies for grid fees each year. Nevertheless, German electricity prices remain structurally high.
Image: Shutterstock
According to McKinsey’s calculations, even new funding models do little to change this situation. While they can shift costs between the state and consumers, they barely reduce the system’s overall costs. At the same time, 97 percent of the industrial companies surveyed cite high and volatile energy prices as their greatest burden. Furthermore, 85 percent complain about regulation, and 75 percent point to a lack of investment certainty.
One trillion euros will not automatically solve existing problems
This imbalance becomes particularly apparent when looking at the years ahead. Despite the already heavy burdens, the energy transition could require up to 1,000 billion euros within a decade. At the same time, McKinsey finds that nine of the 15 targets analyzed are not on a secure trajectory. Clearly, therefore, more money does not automatically lead to faster or more efficient implementation.
This gap is particularly evident in the area of climate protection. The German Environment Agency currently projects an emissions reduction of 62.6 percent by 2030 compared to 1990 levels. However, the statutory target is at least 65 percent. Current projections indicate a shortfall of around 30 million tonnes of CO₂ equivalents. Moreover, even achieving the cumulative target by 2030 is now considered to be off track.
Power grids and firm capacity drive up costs by billions
At the same time, the financial requirements do not end with the construction of new wind turbines and solar installations. Power grids require massive expansion, while new dispatchable power plants are needed to secure the energy supply during periods of low wind and solar output. Transmission system operators have proposed 159 additional measures for this purpose in the current grid development plan alone; the Federal Network Agency currently deems 118 of them necessary.
While the rapid expansion of renewable energy has indeed transformed electricity generation—with renewables accounting for 61.8 percent of net public electricity generation in the first half of 2026—grid expansion, firm capacity, high electricity prices, and climate targets remain unresolved challenges. The energy transition thus reveals a fundamental cost issue: financial investment continues to rise without key policy goals moving any closer at a commensurate pace.
Author: Blackout News
Sources: Welt (04.09.26) – McKinsey (07.07.26)