Energy Newsletter

German households pay approximately 39 ct/kWh and thus about one third more than the EU average, despite Germany generating over 50% of electricity from wind and solar in 2025. Cause: merit-order effect due to gas price volatility and lack of grid infrastructure for storage. Massive competitive disadvantages compared to USA (7-8 ct/kWh) and China (8 ct/kWh) jeopardize industrial location.

Planned gas power plant expansion significantly exceeds long-term capacity needs; Hamburg is already rationing electricity connections as transmission networks cannot cope with energy transition. Federal Network Agency warns: 9 TWh of wind power curtailed in 2025, 3 billion euros in grid congestion management. Systemic infrastructure crisis jeopardizes supply security.

Commercial storage becomes key against negative electricity prices and grid instability; four transmission system operators announced new, restrictive allocation procedures in February 2026. Federal Network Agency criticizes overly strict conditions that favor established providers and hinder innovation. Strategic market for battery technology and flexibility blocked.

Renewable energy share in Q1 2026 rose to 53%; wholesale prices fell 8.7%; 0.62 TWh net exports thanks to declining gas prices and offshore wind records. Positive signals for energy transition, but volatile gas price amplification remains a risk. Demonstrates potential with grid expansion and storage.

Total energy transition budget by 2049 estimated at 4.8 trillion euros; 341,500 industrial jobs lost since 2019, trend accelerating in 2026. Energy Minister Reiche acknowledged in early April that society has been complacent about ambitious targets, while electricity price explosion leads to deindustrialization. Critical reassessment of energy transition strategy required.