The unfinished reform. An assessment of the energy transformation in Germany

Abstract:

In its time in power, which is shortly to end, the CDU/CSU-SPD coalition introduced key legislative changes enabling a further transformation of the energy sector. Due to a reduction in the amount of subsidies offered to renewable energy sources (RES), further rises in electricity prices could be brought to a halt. To date, this increase in electricity costs has been the major problem associated with the energy transformation.

Despite this, many other problems surrounding the energy policy remain unresolved. This mainly concerns the overly slow pace of reducing greenhouse gas emissions, the future of the coal energy sector, the energy transformation in the transport sector and the extension of electricity networks, which is of key importance for the development of RES.

For the new German government, the energy transformation will continue to pose a major challenge. Moreover, Germany will need to redefine its role in the international arena. At the beginning of this decade, Germany was a leader in both the field of climate policy promotion and in low emission technologies. In spite of this early advantage, other countries are now equal competitors in the fight for leadership of international climate policy. For German companies, these new entrants represent a genuine threat across an increasing number of markets.