With Germany on the brink of a pivotal election, we want to share our high-level views on energy policy and the key considerations for voters. We’ve outlined five fundamental theses to keep this concise and to the point.
It’s the climate, stupid
Amid debates on energy policy, people often lose sight of the core reason behind the transition to green power: the climate crisis. Germany’s economic downturn, security concerns, and migration issues pale in comparison to the existential threat posed by unchecked carbon emissions. We may have already missed the 1.5-degree target, and global emissions continue to rise at an alarming rate. While this is disheartening, there is hope: in leading economies, GDP growth is increasingly decoupled from CO₂ emissions. Wind, solar, and energy storage have become viable, cost-competitive alternatives. But let’s be clear: transitioning from a dispatchable fossil-based system to a weather-dependent renewable one is challenging and costly. It is, however, an immense opportunity for future growth.
If climate change weren’t an issue, burning gas and coal indefinitely would be the simplest and cheapest option. If CO₂ were priced at zero and energy costs aligned with U.S. gas prices (currently around 14 USD/MWh), renewables wouldn’t be able to compete in the foreseeable future. That is an undeniable fact. Renewables are fully competitive in some (sunny) places without strong grid access and with falling costs they could be fully competitive everywhere. The 1 GW baseload project from solar and battery in the UAE is already beating European nuclear plants on cost but these are still outliers. We must stop pretending that renewables, once grid and system update costs are accounted for, are inherently cheaper than conventional plants if we disregard emission costs. They are complex to manage. Yet, they present a major opportunity—because as the world inevitably transitions, the nations mastering these technologies will reap the economic rewards.
Germany’s Energiewende only makes sense if we serve as a global trailblazer. Our energy transition is a success only if others follow. The CO₂ emitted by Germany itself is problematic, but not so relevant in the larger context of global emissions. This means that efficiency and cost-effectiveness are paramount. Pushing from 90% to 100% emissions reduction will come at a steep price, yielding diminishing returns. We must remain pragmatic. Germany does not need to be a perfect student (Musterschüler) if doing so would cripple our economy. If we fail, no one will emulate us.
Take, for instance, the debate on hydrogen-ready gas peakers. Converting them is extremely costly and makes little difference in emissions, as these plants will rarely operate. Instead of fixating on absolute zero emissions, we should accept minor COâ‚‚ emissions at the margins rather than waste immense resources on unrealistic 100% reduction goals.
Our objective should be to drive down global CO₂ reductions. To achieve this, we must create a model others want to replicate and invest strategically in our strengths. There is no benefit in self-sabotage—sacrificing economic vitality for a symbolic 100% emissions reduction target will only make Germany an example of failed energy policy.
Questions derived from this that you should ask every energy politician
"How does your proposal contribute to a meaningful reduction in global COâ‚‚ emissions?"
"Have you considered more cost-effective alternatives for reducing COâ‚‚ emissions? Why should we prioritize your approach over lower-cost, high-impact solutions?"
Flexibility is the key to stability
We have successfully completed the first phase of the energy transition: deploying large-scale renewables at speed and relatively low cost. The steep drop in solar and wind prices, partly due to Germany’s early investments, is arguably our biggest global contribution to combating climate change.
The next step is to maximize flexibility and phase out coal and, later, gas. That means all renewable assets must become adaptable, curtailing production when prices turn negative—a capability small-scale systems currently lack. Demand must also become flexible: industry subsidies that encourage baseload consumption must be abolished immediately. Their continued existence is absurd and counterproductive. Every household should have a smart meter, enabling consumers to shift electricity use—such as charging EVs or running heat pumps—when renewables are plentiful. Our failure to implement this is an embarrassing shortfall in Germany’s energy transition.
Battery energy storage systems (BESS) must be deployed at scale, with minimal government interference. These technologies are already competitive—no subsidies required. Just grant fast grid access and let the market handle the rest.
And, as unpopular as it may sound, we must build gas peakers immediately. Ignore RWE’s pleas for capacity market subsidies—if private companies can build rockets without government hand-holding, they can certainly finance gas peakers. Financial markets are sophisticated enough to manage this risk, and recent price spikes to €936/MWh should be incentive enough. The government’s role? Make a firm commitment: no intervention in short-term price formation and no capacity market. Once the state steps back, even RWE might remember it’s a private company capable of investing without bureaucratic babysitting.
Questions derived from this that you should ask every energy politician
"How does your proposal support the integration of renewables and improve grid flexibility?"
"Is your proposal a necessary and effective measure, or does it introduce unnecessary complexity and subsidies that hinder market-driven solutions?"
Location, location, location
Germany’s energy market operates as a unified Kupferplatte (copper plate), assuming a single price nationwide and ignoring grid constraints. This is an illusion, and reality is catching up fast.
To optimize power production and consumption geographically, markets need accurate price signals—yet the current system provides none. While liquid marketplaces are valuable, the costs of redispatch demand a solution: Germany must be split into multiple price zones.
Today, excessive wind power in the north and high demand in the south often force us to shut down northern wind farms while ramping up gas plants in the south. This is costly. Simultaneously, we regularly curtail solar plants in the south when prices go negative while gas plants are ramped up. This is absurdly counterproductive and inefficient. Batteries face similar challenges, unable to account for grid congestion. Basically, assets need to know where they are.
Dynamic local grid fees should also be introduced. A rooftop PV system in Bavaria may make less economic sense than one in Berlin’s industrial zones, where demand is higher. Smarter price signals would align investments with actual system needs.
Markets function best when they have clear, localized information. Prices should reflect the realities of energy supply and demand—including geographic constraints. It’s that simple.
Questions derived from this that you should ask every energy politician
"Does your proposal strengthen price signals to optimize resource allocation efficiently, or does it primarily serve narrow regional interests?"
Size matters
It’s time to acknowledge the hard truth: the energy transition cannot remain a feel-good project for individual homeowners. Energy prices matter to industry and consumers alike, which means cost matters.
A rooftop solar system costs €1,500/kW, while a utility-scale installation costs just €500/kW — three times less. The same cost disparity exists for home storage versus large-scale BESS. Small-scale projects are viable only because they exploit grid fee loopholes, shifting costs onto others. As this practice of self-consumption grows, the burden of paying for the grid falls on fewer shoulders. This is unsustainable. Grid fees must be restructured to reflect actual costs—higher capacity charges and lower volumetric fees.
When given a level playing field, large-scale renewables will outcompete small-scale systems. The truth is, small-scale generation will likely turn into a niche market for hobbyists and enthusiasts. If we continue subsidizing inefficiency, we will face mounting public resistance and an exodus of energy-intensive industries.
Just as we don’t sustain ourselves on backyard vegetables, we cannot power an industrial economy with rooftop solar. Germany thrives on industrial-scale production. It may not be romantic, but it’s time to accept reality.
Questions derived from this that you should ask every energy politician
"Does your proposal account for the cost differences between small- and large-scale renewable projects? How does it ensure the most efficient use of resources for maximizing renewable energy deployment?"
Freedom at last
In 2023 we imported 3.200 TWh of oil, gas and coal and 12 TWh of power. Renewables are mostly homemade and make us less dependent on autocratic states. Germany is a small trading economy and trade is generally to be seen positively! But in these times it is possible to understand that renewables make us more free and less dependent.
The other freedom we should strive for is freedom from government interference. The current global trend is to reduce state intervention and give markets more room to operate. We support this shift.
We would prefer externality pricing through a strong and committed EU ETS and high CO₂ prices instead of the often-bureaucratic EEG to further drive the transition. While it may slow renewable deployment, we must ask: are the rigid deployment targets truly sacrosanct? The sector has had ample protection—it's time for it to stand on its own and learn how to deal with risk.
Bureaucratic barriers to smart meter deployment must be lifted to accelerate rollout at lower costs. EVs charging during sunny afternoons is a paramount step and for this we need smart meters.
Grid connections should be market-driven, with investors bidding in competitive tenders.
Finally, nuclear power should be legal to build—provided it covers its full costs. Realistically, no one will invest. It’s too expensive, too complex, and politically unviable in a country that struggles to approve new power lines.
Questions derived from this that you should ask every energy politician
"Does your proposal recognize that the renewable energy sector is mature and capable of standing on its own, or does it continue to provide unnecessary protections that hinder market-driven growth?"
"How does your proposal strengthen Germany’s energy security and independence from autocratic states while ensuring a secure and affordable energy supply?"
Summary
Despite criticism from conservative circles, the energy transition remains one of Germany’s smartest policy decisions. Yes, it’s challenging and expensive—but we always knew it would be. Mistakes have been made and will be made; that is normal when taking risks. The key is to push out dirty technologies pragmatically, harness technological benefits, and maintain cost discipline. The greatest crisis humanity faces is climate change. That’s why we’re doing this.