Before the 2024 summer break, the coalition parties in the German government agreed on a budget for 2025 and a "Growth initiative - new economic dynamism for Germany". This working paper focuses on various measures to stimulate the economy without placing a particular burden on public finances. Chapter V mentions the reforms planned in the German energy sector in the long and medium term. In addition to CO₂ storage and the expansion of an efficient hydrogen infrastructure, the following instruments and measures are intended to stabilize the energy market in the future in accordance with the growth initiative:
Promotion of renewable energies
Es ist geplant, die Förderung der Erneuerbaren Energien (EE) auslaufen zu lassen, sobald der komplette Kohleausstieg erfolgt ist, der deutsche Strommarkt sich stabilisiert hat und ausreichend Stromspeicher installiert wurden. Ab dann will man EE-Projekte primär über die Investment costs in order to ensure undistorted price signals. In addition, the intention is to increase support for new installations at negative electricity prices in principle from 2025. Small systems are initially excluded from this. The German government would also like to gradually reduce the obligation to market electricity directly to systems of 25 kWp or more from 2025.
Electricity storage as an important component of the growth initiative
A further aim of the growth initiative for the energy market is to optimize the framework conditions for the use of electricity and gas. Battery storageincluding undistorted price signals and time-variable regional grid charges. In particular, the Planning and approval processes for storage projects accelerated in order to make better use of volatile renewable energies.
Grid costs, grid fees & electricity tax
Grid costs are to be reduced and grid fees stabilized as part of the growth initiative in order to ease the burden on companies and private households. To this end Time-variable grid charges and measures for Utilization of surplus electricity and the use of virtual lines and network equipment. The Electricity tax reduction for the current group of beneficiaries remains permanently at the EU minimum of 0.05 ct/kWh. To this end, the traffic light coalition Electricity price compensation (SPK) extend until 2030 and extend it to other sectors of the economy.
Capacity mechanism in accordance with the growth initiative
A staggered capacity mechanism is to be set up in order to secure the electricity supply in the long term. Planned are Tenders for additional power plant capacitiesincluding five gigawatts for new natural gas-fired power plants and five gigawatts for hydrogen-capable gas-fired power plants. These measures will be specified in a new Power Plant Safety Act.
Prioritize market design for power plants & RE
A new Market design for power plants should prioritize renewables and flexibility, with the aim of achieving a share of at least 80 percent renewable energies in the electricity supply by 2030. All Obstacles on the supply and demand side should dismantled to create a more flexible electricity market that benefits from favorable electricity prices when there is a lot of wind and sun.
Further measures
Additional measures include the acceleration of the hydrogen ramp-up, the evaluation of the Offshore wind tenders, the staggered network expansion to reduce costs, securing and Diversification of the gas supplywhich Promotion of fusion energy and the decarbonization of the heat supply.
Reactions and concerns about the growth initiative
Many experts and the German Renewable Energy Federation (BEE) welcome the New flexibility in the electricity market. However, they warn against an abrupt switch from the Market premium to Investment cost subsidiesas this could lead to uncertainty and a reluctance to invest. The planned abolition of hedging in the event of negative prices for new renewable energy plants from 2025 is seen by the BEE as "fatal sign" is labeled.
How should the growth initiative for the energy market be assessed?
The German government is planning extensive reforms to modernize the energy market, promote renewable energies and increase the flexibility of the electricity market. In the long term, this should contribute to a secure and cost-efficient energy supply and strengthen economic dynamism. However, the success and practical implementation of these measures will depend on the Financial viability and political and practical feasibility.