11Energy & Industry · Policy field

Energy policy, recalibrated

Since May 2025 Katherina Reiche has run German energy policy from the renamed Federal Ministry for Economic Affairs and Energy. Her stated priorities are cost, security of supply and closer alignment of renewables with grids and demand. This page sets out the system she inherited, the figures that frame it, the decisions taken so far and the main lines of criticism.

Katherina Reiche at a lectern of the Federal Ministry for Economic Affairs and Energy.

Verified fact Political position Analysis Criticism Each contested statement on this page carries one of these labels. Figures give a year and a source. Status as of October 2026.

01Architecture

Who decides what in German energy policy

German energy policy rests on a small number of federal laws and one powerful regulator. The Renewable Energy Sources Act (EEG) governs support for wind, solar and other renewable generators. The Energy Industry Act (EnWG) sets the rules for electricity and gas networks and supply. The Federal Network Agency (Bundesnetzagentur, BNetzA) regulates the grids, approves transmission lines and the hydrogen core network, and runs the tenders for renewables and new power plants. The ministry drafts the laws, the Bundestag and Bundesrat pass them, and in many areas the European Commission must approve the support schemes under state-aid rules.

Verified fact The Chancellor's organisational decree of 6 May 2025 renamed the Federal Ministry for Economic Affairs and Climate Action (BMWK) the Federal Ministry for Economic Affairs and Energy (BMWE) and moved several areas out of it:

Responsibilities moved out of the economics ministry, May 2025
Area	Moved to	Decree section
Climate protection and climate partnerships	Environment, Climate Action, Nature Conservation and Nuclear Safety ministry (BMUKN)	IX.1
Transformation policy	Federal Ministry of Finance	III.2
Space, innovation and technology policy, SPRIND, gigafactories	Research, Technology and Space ministry (BMFTR)	X.1
Digital policy, better regulation, digital economy	New Ministry for Digital Affairs and State Modernisation	XII.4

Source: Organisationserlass des Bundeskanzlers, 6 May 2025 (BGBl. 2025 I Nr. 131).

Analysis The split matters for how her record is read. Energy supply, prices, grids, the EEG and power plants stayed with Reiche. Climate targets and the climate-protection programme now sit with the environment ministry. Disagreements between the two houses, for example over the EU methane regulation in mid-2026, therefore play out between ministers of different parties. The climate side is covered on Climate & Transition.

02Generation

The electricity mix she inherited

Germany generated 507.5 TWh of electricity (gross) in 2025, according to the preliminary balance of AG Energiebilanzen (AGEB). Wind was the largest single source, ahead of solar and natural gas. Lignite remained the fourth-largest source, two years after the last three nuclear plants – Isar 2, Emsland and Neckarwestheim 2 – closed on 15 April 2023. Under the 2020 Coal Phase-out Act, coal-fired power must end by 2038 at the latest.

Wind26.3%

Solar PV18.0%

Natural gas17.0%

Lignite14.6%

Biomass8.4%

Hard coal5.8%

Hydro3.3%

Other5.4%

Share of gross electricity generation, 2025 (total 507.5 TWh). Preliminary AGEB data, February 2026. Bar length relative to the largest source. Petrol and saffron: renewable; green-grey: fossil and other.

Renewables in gross electricity consumption

202351.8%

202454.4%

202555.1%

Scale 0–100%. 2023: UBA/AGEE-Stat initial figure, later revised to 52.9%. 2024: AGEE-Stat. 2025: AGEB, preliminary; a BDEW/ZSW estimate gave "almost 56%".

Analysis Different measures give different headline numbers. Presenting the monitoring report in September 2025, Reiche said almost 60 per cent of German electricity came from wind, sun and other renewables. That is close to the Destatis figure for electricity fed into the grid in 2024 (59.4%). The share of gross consumption, which is the yardstick for the legal 80 per cent target for 2030, was lower, at 54.4 per cent in 2024 and about 55 per cent in 2025.

Verified fact Build-out continued in her first full year. The Bundesnetzagentur recorded 16.4 GW of new solar capacity in 2025, bringing the total to 117 GW against a 2030 target of 215 GW, and 4.6 GW of new onshore wind (68.1 GW in total). Almost 20.8 GW of onshore wind received permits in 2025.

03Affordability

Prices and the relief package

Cost is the theme Reiche returns to most often. The relief package that took effect on 1 January 2026 has three main parts. The government estimates it is worth about €10 billion a year, on top of the roughly €17 billion a year it already spends to cover the former EEG levy from the federal budget.

6.5bn €

Federal subsidy towards transmission grid fees in 2026. The law has been in force since 12 December 2025.

Federal Government, Feb 2026

~3bn €/yr

Electricity tax cut permanently to the EU minimum for more than 600,000 manufacturing, farming and forestry firms.

Federal Government, Feb 2026

0levy

Gas storage levy abolished from 1 January 2026; the legal change took effect on 28 November 2025.

Federal Government, Feb 2026

34.87ct/kWh

Average price for new household customers in January 2026, down 6.7%. The government estimates a household saving of about €160 a year.

Federal Government, Feb 2026

The industrial electricity price

Verified fact On 16 April 2026 the European Commission approved an Industriestrompreis under its CISAF state-aid framework. It is worth €3.8 billion for 2026–2028, applies retroactively from 1 January 2026 and is open to about 9,500 companies in 91 sectors. The target price is 5 ct/kWh: the state covers up to half of the wholesale price on at most half of a firm's annual consumption, and at least half of the aid must be reinvested in new or modernised plant. BAFA administers it, and applications for 2026 open in 2027.

What comes next

Verified fact In August 2026 the cabinet planned to cut the transmission grid-fee subsidy to €5.525 billion a year for 2027–2029, financed from the Climate and Transformation Fund (KTF), roughly 15 per cent less than in 2026.

Criticism Households and small businesses were left out of the electricity tax cut. The chemical industry association VCI said of the industrial price: "Diese Entlastung ist zu gering" (this relief is too small).

"For the very first time, we are creating the framework for an industrial electricity price that specifically relieves the energy-intensive industries so important to Germany."

„Erstmals überhaupt schaffen wir den Rahmen für einen Industriestrompreis, mit dem wir speziell die für Deutschland wichtigen energieintensiven Industrien entlasten.“

Katherina Reiche on the EU approval, 16 April 2026 (pv magazine)

Case study: the price relief package · Industry & Economy

0415 Sep 2025

The "reality check": monitoring report and ten-point plan

In May 2025 Reiche announced a "Realitätscheck" of the energy transition. On 15 September 2025 she presented the result: a report of about 260 pages, Energiewende.Effizient.Machen, commissioned from the Cologne institute EWI and the consultancy BET. Its central finding was that electricity demand in 2030 is likely to be 600–700 TWh, below the planning assumption of 750 TWh. Reiche said the ministry expected demand "eher am unteren Ende" (rather at the lower end). The report judged the 80 per cent renewables target for 2030 realistic, and she said the government would keep it.

Lower expected demand, the ministry argued, means renewables, grids and back-up capacity can be planned more tightly – and more cheaply.

The ten measures (as summarised by Gleiss Lutz)

Plan renewables and grids against realistic demand of 600–700 TWh.
Market-based support: no fixed feed-in tariff, no payment at negative prices; two-sided contracts for difference and clawback.
Synchronise grid, renewables and flexibility: co-location, a "Netzampel", cable pooling, capacity-based grid fees.
A technology-neutral capacity market, starting with gas plants that can switch to hydrogen.
Digitalisation and flexibility, including the smart-meter rollout, then below 3 per cent.
Keep electricity, gas, hydrogen and CO₂ markets unified and liquid.
Review support programmes and cut subsidies systematically.
Research: deep geothermal, fusion, hydrogen, CCS/CCU and AI.
A pragmatic hydrogen ramp-up.
Establish CCS/CCU and reform the Carbon Dioxide Storage Act.

"The expansion of renewable energy is undoubtedly a great success – almost 60 percent of our electricity already comes from wind, sun and co."

„Der Ausbau der Erneuerbaren Energien ist zweifellos ein großer Erfolg – heute stammen schon fast 60 Prozent unseres Stroms aus Wind, Sonne und Co.“

Katherina Reiche presenting the monitoring report, 15 September 2025 (Solarserver)

Welcomed

The energy industry association BDEW called it "ein überzeugender Aufschlag" (a convincing start). The industry federation BDI spoke of a "notwendige, vorbehaltlose Bestandsaufnahme" (necessary, unreserved stock-take). The renewables association BEE called the analysis "intensive, stimmige und substanzielle".

Criticised

Before publication, Deutsche Umwelthilfe warned the scope would underestimate demand, and Green MP Sven Giegold said she had called renewables expansion "completely overblown" (English as reported). In late September 2025 media reported that the ten-point plan overlapped, partly word for word, with RWE and E.ON position papers. In December 2025 Greenpeace alleged 28 changes between the experts' draft and the published report.

Case study: the monitoring report · Controversies

05Market design

Markets: capacity, contracts and the gas-plant auctions

Two market-design questions dominate her term. The first is how to pay for controllable power plants that run only when wind and sun are short. The second is how to support renewables without paying fixed tariffs regardless of market prices.

Verified fact The May 2025 coalition agreement planned up to 20 GW of new gas capacity by 2030; Robert Habeck's 2023 plan had foreseen 23.8 GW. After talks with Brussels, the government reached agreement in principle with the European Commission on 15 January 2026 on 12 GW to be tendered in 2026: 10 GW of long-term capacity, mainly gas plants that must be hydrogen-ready and decarbonised by 2045 at the latest, and 2 GW open to any technology. The Electricity Supply Security and Capacity Act (StromVKG) passed the Bundestag on 9 July 2026 and provides for a technology-neutral capacity market from 2032.

StromVKG auctions, as of October 2026
Round	Volume	Status
First round	4,500 MW	Closed 8 September 2026; "deutlich überzeichnet" (significantly oversubscribed), according to the BNetzA. Awards due by 3 November 2026. Price cap €244,000 per MW per year; 15-year contracts.
Second round	4,500 MW	Scheduled for late December 2026 (sources differ on the exact date).
Third round	2,000 MW	May 2027

Criticism In April 2026 Der Spiegel reported that the ministry had asked EnBW for proposals on the auction design, which would have disadvantaged battery storage, for example through a ten-hour continuous-operation requirement. The document was entered in the lobby register only after Spiegel's inquiry. LobbyControl demanded clarification. In May 2026 the Federal Cartel Office criticised the draft capacity law for favouring existing plant sites and gas.

Political position For renewables, the ten-point plan and the draft offshore law move towards two-sided contracts for difference (CfDs). Under a CfD the state tops up revenue when market prices are low and claws back money when they are high.

Case study: new controllable power plants · Controllable capacity and security

06Legislation 2026

EEG 2027 and the grid package

On 29 July 2026 the cabinet approved an amendment of the Renewable Energy Sources Act, known as EEG 2027, together with a grid-connection package (Netzpaket). Both had their first reading in the Bundestag on 24 September 2026. Final votes in the Bundestag and Bundesrat are expected in November. Time is a factor: the EU state-aid approval for EEG 2023 expires at the end of 2026.

"We are ending the EEG as an all-inclusive, worry-free package."

„Wir beenden das EEG als Rundum-sorglos-Paket.“

Katherina Reiche on the cabinet decision, 29 July 2026 (t-online)

Small rooftop PV: New systems under 25 kW get no fixed feed-in tariff from 2027. Instead: a 36-month transition payment of 5.2 ct/kWh, then mandatory direct marketing with a 1.5 ct/kWh bonus for up to four years. Existing systems keep their rates.
Redispatch hotspots: Grid-congestion areas are to be designated where compensation for curtailment is limited; Ingenieur.de reports up to 20 per cent of annual output would go unpaid.
Grid connection: From "first come, first served" to a "Reifegradprinzip" (maturity principle); network operators get wider powers to charge a construction-cost contribution (Baukostenzuschuss).
2030 target: 80 per cent renewables in gross electricity consumption confirmed.
Budget: The government reportedly estimates €12.8 billion of spending for 2027–2032 (single source, cash.ch/AWP).

The grid package in detail

07Solar · Offshore

Rooftop solar and an empty offshore auction

The rooftop solar debate

Political position On 11 August 2025 Reiche told the Augsburger Allgemeine that new small PV systems already pay for themselves in the market and need no subsidy (indirect speech as reported). She added: "All das macht unser Stromsystem unnötig teurer. Das will ich ändern." ("All this makes our power system unnecessarily expensive. I want to change that.")

Criticism The Greens, the solar association BSW-Solar – which said the plan "würde die Klimaziele gefährden" (would endanger the climate targets) – and installers objected. A ministry draft of February 2026 drew objections from SPD ministers. The plan was softened in July 2026 with the transition payment and marketing bonus. The solar industry still warns of a "massiver Einbruch" in installations; industry estimates cited by Ingenieur.de put the possible fall in demand for small systems at two-thirds.

Analysis The position is consistent with her record. As a state secretary in March 2012 she defended solar-subsidy cuts in the Bundestag, arguing that a mass market could not be permanently fed by subsidies.

Offshore: zero bids

Verified fact In August 2025 the auction for the North Sea sites N-10.1 and N-10.2, about 2.5 GW, received no bids at all, a first for Germany. It was a zero-subsidy round, and the industry body blamed the auction design.

Verified fact The ministry's 2026 draft reform of the Offshore Wind Act (WindSeeG) introduces two-sided CfDs, a 35-year standard operating life instead of 25, and from 2027 an annual auction corridor of 2,000–4,800 MW instead of a fixed 4,000 MW. No offshore auction takes place in 2026. The offshore association BWO supports CfDs but criticises the two-stage tender design.

08Assessment

Her documented positions, and the main critiques

Cost first

Political position Fewer subsidies, market-based support, lower grid and system costs. She has framed EEG reform as ending a "Rundum-sorglos-Paket".

Demand realism

Political position Plan for 600–700 TWh in 2030, not 750 TWh, while keeping the 80 per cent renewables target.

Firm capacity

Political position New hydrogen-ready gas plants as back-up. She has argued that "Dunkelflauten" can last weeks; see the fact check.

Nuclear

Political position In May 2025 she ruled out a return to conventional nuclear power; in March 2026 at CERAWeek she called the phase-out "a huge mistake". See Climate & Transition.

Slowing renewables?

Criticism Greens, environmental groups and the solar and wind industries argue that cuts to rooftop support, redispatch limits and the demand forecast will slow expansion and endanger climate targets.

Industry proximity

Criticism LobbyControl and others point to her Westenergie past, the overlap with utility papers and the EnBW auction input. The ministry says the legal rules on conflicts of interest are followed.

Analysis

Seventeen months into her term, the direction is clear and largely legislated: a capacity law, a heating-law rewrite and a relief package are in force; EEG 2027 and the grid package are before parliament. What is not yet measurable is the outcome – whether system costs fall and whether build-out slows. Those effects will show in installation and price data from 2027 onwards.

Sources