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13 May 2025, 13:37
Jack McGovan
|
Germany

New German govt's energy policy a “promising” adaptation to reality – Deutsche Bank

The new German government’s energy policy framework is “promising” despite few concrete quantitative targets in the coalition agreement, from Deutsche Bank Research said. The report found that the policy framework is anchored in the triangle between costs, security and climate, and that in the past, policy goals often did not align with energy or economic realities.

Many parts of the coalition agreement mentioned that investments should be system-serving, grid-friendly or demand-oriented. These statements suggest that the ambitious, concrete expansion targets for renewables from previous governments could be adapted to actual and expected future developments in electricity demand and grid expansion, the report found. However, the bank also emphasised that the trend towards renewables continues to be supported.

One of the government’s key aims is lowering the electricity price by at least 5 cents per kilowatt hour, which could offer financial relief for industry to the tune of 10 billion euros annually, and private households 6 to 7 billion euros.

Germany’s new economy and climate minister, Katherina Reiche from the CDU, has called for a “reality check” on the costs and risks of renewables. She said that while the expansion of wind and solar power has allowed Germany to make progress on climate action, the “systemic risks and costs have been underestimated,” and that the further expansion of renewable power sources should be better aligned with grid expansion.

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