In Essen, E.ON CEO Leonhard Birnbaum delivers a critical interim assessment of Germany’s energy transition, noting that solar power surpluses, negative electricity prices, and lengthy approval processes for grid expansion are complicating the next phase of the transformation. The DAX-listed corporation plays a pivotal role in this context: in Germany, E.ON has connected seven out of every ten wind turbines, one in every two solar installations, and half of all large-scale battery storage systems to the grid. At the same time, geopolitical risks—such as a prolonged blockade of the Strait of Hormuz—are exacerbating the situation, as Germany remains heavily dependent on imported fossil fuels despite its ongoing energy transition.
Solar Surplus Becomes a Litmus Test for Grids and Consumers
E.ON ranks among the key players in the energy transition. Consequently, Birnbaum no longer views grid expansion alone as the central challenge. The decisive factor now, he argues, is whether grids, storage systems, digitalization, and flexible consumers can keep pace. The first half of the energy transition has been completed; however, the more difficult phase is just beginning.
On sunny weekends, a massive amount of electricity from solar installations flows into the grid. Consequently, wholesale electricity prices temporarily plummet deep into negative territory. Taxpayers and electricity consumers then bear the costs—even though the installations are supplying vast amounts of energy. This solar surplus thus highlights a new structural imbalance within the power system.
Gas Power Plants Remain in the System as a Reserve
Birnbaum supports the plans of Federal Minister of Economics Katherina Reiche regarding the construction of new gas power plants. Germany requires this reserve capacity because coal is being phased out for climate protection reasons. At the same time, policymakers have decided to exit nuclear energy. Consequently, gas power plants remain as a safeguard against “dark lulls”—periods of low solar and wind generation.
While battery storage can help reduce this demand, it cannot fully eliminate it. Standard storage systems typically bridge a gap of two to four hours; however, wintertime dark lulls often persist for several days. It is precisely in these situations that solar power alone proves insufficient—underscoring the continued need to expand both grid infrastructure and storage capacities.
Industry Has Limited Scope to Shift Electricity Consumption
Private households can often flexibly control electric vehicles or heat pumps; consequently, dynamic electricity tariffs are worthwhile for many customers. In the industrial sector, however, Birnbaum sees tight constraints. A baker requires electricity in the morning, while steelworks cannot simply shut down their personnel and machinery at will.
For the second phase of the energy transition, Birnbaum calls for new regulations. Operators should be held to stricter liability standards if they construct wind turbines in regions where the generated electricity is neither needed locally nor can be transmitted elsewhere. Furthermore, subsidies should be discontinued in instances where facilities can operate economically without financial aid. The surplus of solar energy thus marks the transition from a policy focused solely on capacity expansion to one prioritizing cost control.