At her inaugural address in the ministry, Katherina Reiche, the new German Minister for Economic Affairs and Energy, called for a 'energy policy reality check'.

Addressing Germany's energy policy Katherina Reiche said:
"In order to achieve more market and innovation in the energy sector, we need to re-agree on the basics:

Security of supply has the highest priority. The blackout on the Iberian Peninsula has shown how vulnerable an electricity system can be. We must be prepared to minimise risks of this kind.

The expansion of wind and solar energy has advanced us in climate protection. However, systemic risks and costs were underestimated. That is why we need a reality check in energy policy, which we agreed in the coalition agreement.

Renewable energies alone will not be able to supply an industrial nation like Germany with electricity reliably and at affordable prices. And as the largest electricity consumer in the EU, we cannot rely solely on our neighbours. We need controllable electricity generation in our own country. The coalition agreement mentions up to 20 gigawatts of gas-fired power plants. The tender for this must start quickly. We also want to improve the production conditions for gas domestically. CCS and CCU will also play a stronger role.

The reality check also includes better synchronizing the expansion of renewables with the grid expansion in terms of space and time. We will ensure a thorough stocktaking and then tackle the issue with high priority.

The coalition has also agreed to abolish the heating law. The current law leads to aggression instead of the desired wave of climate protection investments in the building stock. Climate protection needs the acceptance of those who are supposed to invest. We want to solve the investment backlog in old buildings with flexible rules that are oriented towards long-term CO2 reduction. We will make use of the leeway in the implementation of the European Buildings Directive.

Citizens and companies alike are groaning under the excessively high electricity prices of recent years. That's why we want to stabilize and reduce them. To this end, the coalition agreement stipulates, among other things, the introduction of an industrial electricity price, the reform of the system of grid charges and the use of reserve power plants no longer only to avoid supply bottlenecks. We are aware that this will require a lot of work in Brussels.

On the other hand, we want to encourage companies to conclude long-term gas supply contracts with foreign partners and will provide political support for this. Diversification of supplier countries will be important in this context.

We have to make the electricity system more flexible. This means strengthening dynamic electricity tariffs, supporting bidirectional charging and driving forward the expansion of storage capacities that serve the system. We will recognize energy storage systems as being in the overriding public interest.

The coalition has also agreed to make full use of the diversity of renewables, in addition to solar and wind energy, bioenergy, geothermal energy, hydropower and the molecules produced from these energy sources. The same applies here: We have to keep costs under control. We want to implement the Renewable Energy Directive III in a timely manner, accelerate planning facilitation, strengthen the investment framework and at the same time integrate market-based instruments more closely.

To ensure that our industry remains competitive in the future, the coalition agreement provides for a rapid ramp-up of the hydrogen economy and a connection of industrial centres to the hydrogen core network. In this ramp-up, we have to use all colors. However, we will have to import up to 70% of our hydrogen from abroad. That is why we want to expand energy partnerships and cross-border infrastructure projects.

Technology openness is particularly important when it comes to transformation: As of 2025, we definitely do not yet have all the solutions for a climate-neutral and at the same time affordable energy supply. What we already have today is: excellent research, resourceful companies, courageous start-ups and motivated people everywhere in these areas who can develop these solutions. We have to create the necessary freedom for them. This is also a contemporary social market economy."

KeyFacts Energy: Commentary