German Minister of Economy Reaffirms Energy Policy Adjustments

Mon 12th May, 2025

The German government is undergoing a significant shift in its energy policy as Katherina Reiche, the newly appointed Minister of Economics, outlines her vision for a more pragmatic approach. This change follows the transition of the ministry from the Green Party to the Christian Democratic Union (CDU).

During her address at the CDU Business Day in Berlin, Reiche acknowledged the economic strains imposed by external factors, notably the ongoing conflict in Ukraine. However, she emphasized that many of the challenges faced by the German economy are internally generated and can be tackled through effective reforms.

Reiche identified the urgent need for the construction of new gas power plants, arguing that high taxes, energy costs, and elevated labor expenses are detrimental to Germany's competitive position. She called for a reorientation of the energy transition, suggesting that the previous emphasis on climate protection may have been excessive. According to her, relying solely on renewable energy sources will not provide the cost-effective electricity supply required, particularly for energy-intensive industries.

To address this issue, she urged for the immediate initiation of tender processes for the 20 gigawatts of capacity agreed upon in the coalition contract. Furthermore, Reiche advocated for a policy of technological openness, asserting that it is unrealistic to expect to have all necessary solutions in place by 2025 to achieve climate neutrality by the middle of the century.

Part of her strategy includes the implementation of carbon capture and storage techniques for unavoidable emissions from energy-intensive sectors and gas power plants. She underscored the importance of reducing carbon emissions in the building sector without overly restrictive regulations that could stifle innovation.

While acknowledging that the expansion of renewable energy has contributed to advancements in climate protection, Reiche also highlighted the significant system costs and risks associated with this transition. She pointed out the need for better coordination between the expansion of renewable resources and the necessary upgrades to the energy grid.

Reiche's proposed adjustments in the energy policy reflect an understanding of the current economic landscape while aiming to balance environmental goals with the practical needs of the German economy.


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