Since 2000, Germany has transformed its energy supply at a rapid pace, politically driven by a concerted effort to phase out nuclear power, initiate the coal phase-out, massively promote wind and solar energy, plan new power lines, and further electrify transportation and heating. These transformations were driven by climate policy, the commitment to phasing out nuclear power, and ever-increasing regulations from Berlin and Brussels. However, the central problem lies in an energy transition that was politically and ideologically forced, even though technology could not keep pace: grids, storage facilities, reserve power plants, and guaranteed capacity are growing too slowly. This results in high electricity prices, billions in system costs, compensation for unused electricity, and a supply that remains dependent on coal and gas during periods of low wind and solar power generation.
Politics set goals before technology could deliver.
The change of course began with the Red-Green coalition. The Social Democrats and the Greens agreed to phase out nuclear power, and in 2000 the Renewable Energy Sources Act (EEG) promoted the expansion of wind and solar power with priority grid access and fixed feed-in tariffs. Thus, the focus was not on the technical sequence from the outset, but on a political vision. The decision was made first, and the infrastructure was to follow.
The timeline for the nuclear phase-out changed later, but not the overall direction. Under Angela Merkel, operating licenses were initially extended, then shortened again after Fukushima. Merkel stated at the time: “The risks of nuclear power are unmanageable.” Therefore, regular operation ended earlier than initially planned. Due to the Russian attack, the coalition government extended operations only until mid-April 2023.
Constantly new regulations, but no sustainable overall system
Beyond nuclear power, policymakers intensified the transformation. The nuclear phase-out was followed by the agreed-upon coal phase-out and further climate policy targets from Berlin and Brussels. In 2018, the German government established a coal commission, and in 2020, the law phasing out coal mining by 2038 was passed. Furthermore, the EU declared climate neutrality by 2050 a strategic goal.
Later, the targets became even more ambitious. In 2023, Robert Habeck stipulated that 80 percent of the German electricity market should consist of renewable energies by 2030. The share was then, as it is now, only around 56 percent. In the transportation sector, reality also fell far short of political expectations. Instead of 15 million fully electric cars by 2030, only around two million electric cars were on German roads in 2026.
Technological shortcomings make the energy transition expensive and unstable
Wind and solar power now supply more than half of Germany’s electricity. However, this is only sufficient to cover around 20 percent of total energy demand. Heating, transportation, and industry therefore remain largely dependent on other energy sources. The weakness of the model becomes particularly apparent during periods of low wind and solar output, as gas and coal-fired power plants then have to step in. The technology for a stable renewable energy system is therefore not yet available to the extent that policymakers have long anticipated.
Veronika Grimm clearly identifies the gap: “We have made progress with renewables, but grid expansion and the development of flexibility are not keeping pace. We urgently need gas-fired power plants and a secure gas supply for the transition. If we don’t organize this transformation phase intelligently, then the entire energy transition project is at risk.” This is precisely where the design flaw lies. Guaranteed power was shut down even though replacements, storage, and grid capacity were not available in time. The technology was intended to secure a political ideal, but it couldn’t bear this burden.
High electricity prices are hitting industry and households alike
The consequences are particularly evident in the price. According to the figures mentioned, a kilowatt-hour of electricity costs around 8 cents in China, 16 cents in the USA, and 37 cents in Germany. This is a serious disadvantage for an industrial location. Peter Adrian therefore says: “Germany has the highest electricity prices in Europe. The federal government must take countermeasures.” According to a survey by his chamber, around 60 percent of large industrial companies are planning to reduce their production or relocate it abroad.
At the same time, the costs of the overall system continue to rise. The DIHK study “New Paths for the Energy Transition” projects energy system costs of up to 5.4 trillion euros by 2050. This includes grid expansion, new power plants, storage facilities, and subsidies. Katherina Reiche also points to three billion euros in compensation annually for renewable electricity that cannot be used due to overloaded grids. This illustrates how contradictory the transformation is: The government subsidizes generation even though the necessary infrastructure is lacking in many places.
Grids are lacking, demand is rising, and the bill is growing
This is particularly evident in the construction of power lines. According to the Federal Network Agency, 16,800 kilometers of power lines are needed, but only 3,500 kilometers had been completed by June 2025. As a result, electricity is often produced where it isn’t needed, while conventional power plants have to step in elsewhere. This is expensive, inefficient, and reflects an energy transition that has prioritized political objectives over physical limits.
At the same time, electricity demand is rising sharply. Currently, it stands at just over 500 terawatt-hours. By 2030, it could grow by up to 50 percent, reaching 1,000 terawatt-hours by 2037 and 1,300 terawatt-hours by 2045. According to available data, wind and solar power alone cannot sustain this increase. Reiche summarizes the cost implications as follows: “Yes, wind and solar don’t send a bill. But the entire system certainly does.” According to their figures, network expansion, reserve costs and other system loads amount to 36 billion euros per year, or around 430 euros per capita. (KOB)