The minister expressly reaffirmed the climate goals, but also emphasized the financial viability of the energy transition and the security of supply. She stated that climate protection would only succeed if energy policy were financially feasible. Cost-effectiveness is therefore the top priority, and there are numerous levers that can be utilized to achieve this.

Future electricity demand will be lower than previously projected by policymakers.

The commissioned research institutes BET and EWI project electricity demand of 600 to 700 TWh for the year 2030, which is significantly below previous political expectations. This downward revision in the electricity demand forecast is due not only to the slow growth in the adoption of electric vehicles and heat pumps but, above all, to the sluggish electrification of industry, the crisis-induced decline in industrial electricity consumption, and the lack of new electrolyzer installations. The projected range of future electricity demand closely reflects the findings of the BDI analysis on this topic.

The BDI’s recommendation to adjust the expansion of offshore wind capacity—as a key lever for more cost-effective grid expansion—is also reflected in several sections of the monitoring report. The BDI has long advocated that grid expansion should not be designed to accommodate every last kWh, but rather should prioritize sensible utilization and cost efficiency.

In the future, renewable energies should be promoted in a way that better serves the market and the system.

To enable cost-efficient system planning, Reiche also envisions support for renewable energy that serves both the market and the system. Specifically, this means, among other things, abolishing the fixed feed-in tariff for renewables, ending compensation when prices are negative, and applying differentiated financing models such as two-way Contracts for Difference (CfDs) and power purchase agreements (PPAs).

In addition to the targeted development of grid interconnection points, “co-location”—that is, the joint installation of power generation facilities and energy storage systems at the same site—is also intended to spatially manage the expansion of renewables and thereby optimize grid expansion in line with demand. However, since this will have an impact on the levelized cost of renewable electricity, further analysis is needed here to assess the resulting reduction in grid costs.

Security of supply and periods of low wind and low sunlight—how quickly will the new controllable power plants be available?

To ensure security of supply even during periods of low wind and low sunlight, a technology-neutral capacity market is also to be implemented; in particular, gas-fired power plants with the option to switch to hydrogen are expected to play a key role here. The first tenders are scheduled to take place by the end of the year, and according to Reich’s plan, a capacity market will be introduced by 2027. The BDI welcomes the announced simplification of power plant tenders but emphasizes the need for very rapid implementation. Investments must now be triggered quickly, and tenders must be structured in such a way that high-price periods during periods of low wind and solar output can be efficiently offset.

The ramp-up of hydrogen production is to be driven by demand and remain technology-neutral.

The monitoring report shows that there are significant differences in demand scenarios regarding hydrogen and that there is currently hardly any demand on the market. This is due in particular to the gap between supply costs and willingness to pay. It is also highly unlikely that the 10-GW target will be met. Given the high production costs in Germany, a significant need for imports is expected. The BDI also advocates for diversifying the hydrogen supply and tapping into more affordable sources.

Minister Reiche plans to advocate within the EU for simplifying the complex hydrogen regulations and treating green and low-carbon hydrogen equally. In addition, expansion targets for electrolysis, the core grid, and imports are to be adjusted more flexibly to changes in demand in the future.

The BDI also recommends aligning demand scenarios and infrastructure planning more closely with economic realities. Nevertheless, the industry urgently depends on a rapid expansion of the core grid.

Is the 10-point plan sufficient to restore Germany’s competitiveness as an industrial hub?

Reiches’ reorientation of the energy transition leaves open the question of how Germany’s energy costs—which are very high by international standards—can be reduced in the short term. In this regard, the monitoring report calls for further detailed analyses.

Overall, the Energy Transition Monitoring Report and the resulting 10-point plan provide what the BDI considers a necessary and unreserved assessment of the current situation to get the energy transition back on track in terms of climate protection and competitiveness. It now depends on concrete implementation whether—and how quickly—such a reorientation can succeed. The federal government is promising an “autumn of reforms.” This is particularly urgently needed in energy policy to rebalance the energy policy “triangle” of economic efficiency, security of supply, and climate protection.