The German government plans to spend a record €29.5 billion in 2026 to stabilize electricity prices, cover rising energy transition costs, relieve pressure on industrial electricity, and cushion increasingly frequent surplus electricity. This scale is unprecedented, significantly exceeding previous aid programs. However, there is growing concern that short-term relief without structural reforms will lead to even greater burdens in the long run.
Record Energy System Budget – Opportunity or Risk?
The record budget is distributed across reduced electricity taxes, relief for industry, targeted subsidies for grid fees, and additional funding for renewable energies. The government aims to create planning certainty with this measure, while businesses and households must continue to expect high electricity prices in 2026. At the same time, the costs of the energy transition are rising because grids need to be modernized and expanded. Industrial electricity also remains a critical factor, as energy-intensive companies must remain competitive internationally.
But financial aid is no substitute for a structural solution. Experts warn that without more efficient grids and smarter management, the record sum will only buy time, but will not create lasting stability, and certainly not solve the underlying problem.
When relief becomes expensive – experts see systemic flaws
IW economist Andreas Fischer sharply criticizes the strategy. The government is paying extremely high subsidies, but the causes of high electricity prices will still lie deeper in 2026. He calls for more efficient grids and a more precise focus in the expansion of renewable energies so that energy transition costs decrease instead of continuing to rise. The expert commission on the energy transition also warns that permanent government relief sends the wrong signals. Instead, genuine structural improvements should be the priority so that businesses and households do not remain permanently dependent.
Surplus electricity as a hidden price driver
One key factor further exacerbates the situation: With increasing expansion, surplus electricity is generated more frequently. This sometimes ends up on the market at negative prices, or plants are shut down while operators continue to receive payments. This overproduction of electricity causes additional costs that will later translate directly into higher energy transition costs. This clearly demonstrates the urgent need for system optimization that is more oriented towards market principles than central planning.
Billion-dollar programs – but pressure for reform is growing
While the government is introducing new aid, not all of the business community’s expectations are being met. Many companies continue to face high costs for industrial electricity, while consumers are experiencing rising grid fees. A look back illustrates the scale of the problem: Just a few years ago, government spending was in the single-digit billions. Today, a record sum is on the table – coupled with electricity prices continuing to rise in 2026 and increasing energy transition costs.
The future depends on structure, not subsidies
German energy policy is thus at a turning point. Without structural improvements to grids, market mechanisms, and the integration of renewable energies, persistent price spikes are a real threat. Only if industrial electricity is specifically and sustainably relieved of costs, if surplus electricity is integrated effectively, and if energy transition costs remain under control will genuine stability be achieved. Otherwise, the record sum will remain an expensive undertaking – and not a lasting solution.