With the introduction of the current Monitoring report Federal Minister for Economic Affairs Katharina Reiche has opened a new debate about the speed, costs, and direction of German energy policy. The study, produced by the Institute of Energy Economics (EWI) and the consulting firm BET, shows that the challenges could be significantly greater than previously assumed.
The Energy transition accordingly stands before a Stress test. Above all, when future electricity demand and the necessary grid expansion costs the forecasts diverge widely, unlike in other studies, while at the same time government subsidies for renewable energies are to be reduced.
The federal government is opting for a change in course: less classic support, instead, more market mechanisms and investment security Contracts for Difference. At the same time, new gas power plants are to be built as a bridging technology. This means the energy transition is at a crossroads., So, Katharina Reiche.
The BMWK Monitoring Report by EWI & BET
The new monitoring report by the Energy Economics Institute (EWI) and the consulting firm BET provides key performance indicators for the energy transition. According to the report, German electricity consumption will reach 600 to 700 terawatt-hours (TWh) estimated – thus significantly lower than in other studies. Federal Minister of Economics Katharina Reiche even expects a need „in the low 600s“. This assessment is justified by the stagnating sales figures for e-cars and heat pumps, as well as the sluggish electrification of industry.
A second focus is on the Costs for grid expansion until 2045. EWI and BET calculate with 731 billion €. This includes €430 billion for the expansion of transmission networks and €301 billion for distribution networks. This puts the estimates at around $176 billion above previous assumptions The Federal Network Agency, which had assumed a total of only €555 billion. The primary reason for this is the greater decentralization of electricity generation through renewable energies. Wind and solar power plants are increasingly being built in regions that were not previously designed for large amounts of electricity. To integrate these generation capacities into the overall system, the authors see a significantly higher investment requirement in both the transmission grid and the distribution grid.
Alternative Studies in Comparison
The assessments by EWI and BET are not isolated, but rather join a series of analyses that have been published in recent days. It is clear that forecasts for future electricity consumption in Germany vary considerably.
The Federal Network Agency calculates in her study „Security of supply electricity“with a need for 725 terawatt-hours by 2030. This puts it significantly above the assumptions in the monitoring report. The calculations go even further than that Nerve, which was commissioned by Greenpeace and Green Planet Energy, has examined various scenarios. Even in the scenario of a slowed expansion of renewable energies, Enervis predicts a consumption of 758 TWh, while in the reference scenario values of over 800 TWh expected. Agora Energiewende moves with an estimated 701 TWh in midfield. She emphasizes that ambitious climate policy can only be achieved with a dynamic expansion path for wind and solar energy. Both Studies warn of risks of a slowdown of the power grid expansion.
To achieve Germany's climate neutrality in accordance with the Paris Agreement, the EEG was originally adapted for this purpose. Various studies assume the following values to maintain the target trajectory:
When we compare the current studies on the energy transition from September 2025, they vary considerably and already differ for the calculation year 2030.
Similarities & Differences in Energy Transition Studies
Despite the sometimes significant differences in the forecasts for 2030, there is a clear consensus among the analyses by EWI/BET, the Bundesnetzagentur, Enervis, and Agora Energiewende. The The expansion of the electricity grid must not be slowed down., to achieve climate goals and security of supply. There is also agreement that the electrification of industry, transport, and buildings will lead to rising electricity demand in the long term.
Differences are mainly seen in the height of consumption forecasts. While EWI and BET calculate rather conservatively with 600 to 700 TWh, Enervis and, in part, the Federal Network Agency assume significantly higher values of over 800 TWh. Assumptions about the speed of electrification and efficiency gains in industry and households also vary.
The political recommendations for action are therefore derived differently. The BNetzA, Enervis, and Agora are therefore pushing for accelerated expansion of renewable energies with storage to maintain security of supply. The BMWK argues on the basis of the EWI/BET report for more gas and imported electricity and a Adaptation of funding instruments. These are no longer up-to-date for the expansion of renewable energies. Instead, subsidies are to be phased out and more closely aligned with the European framework. The focus here is on the introduction of Difference agreements (Contracts for Difference), which are set to play a central role in the future.
Contracts for Difference (CFDs) as the instrument of choice
To ensure investment security for producers, limit costs for consumers, and align renewable energy subsidies with European guidelines, Reiche wants to rely on contracts for difference. These are intended to replace the sliding market premium in the future.
The basic principle of a CfD is that a renewable energy power plant or energy producer receives a fixed price per kilowatt-hour or megawatt-hour generated. This reference price (strike price) is determined long-term during the planning of a renewable energy power plant, usually within the scope of a tender process, and is generally higher than the current market price. During operation, the operator receives financial compensation as soon as the market price falls below the strike price. Conversely, the operator must repay the difference.
Differential systems are currently used in countries such as Great Britain, France, and Spain and typically have terms of between twelve and up to 25 years. Variants of the model also exist in Denmark and Greece, where they have led to a significant increase in renewable energy expansion. The correct determination of reference prices and the risk of over-subsidization or under-incentivization for innovation are critically discussed there.
What happens next?
The monitoring report from EWI and BET is not an endpoint, but rather the starting point for further political discussions. In the coming months, the results will be debated in the competent expert committees of the Bundestag and in the Bundesrat. In parallel, the Bundesnetzagentur (Federal Network Agency) is critically examining the figures and comparing them with its own scenarios. As an increasingly independent regulatory authority, it plays a key role, which was reinforced by the ECJ ruling from 2021.
The BNetzA approves the grid development plans of the transmission system operators, thereby determining which investments will actually be implemented in the coming years. It will also play an important role in the design of new support instruments such as contracts for difference, to ensure their compatibility with the existing market and regulatory framework.
It also remains open how actual electricity demand will develop. If electrification in the areas of transport, heating, and industry progresses faster than the conservative assumptions of EWI and BET suggest, consumption could grow significantly beyond the „low 600s.“ In this case, expansion targets, network planning, and funding mechanisms would have to be adjusted in the short term to avoid supply gaps and increasing import dependency.
What is certain is that the energy transition remains a dynamic process in which political frameworks must be continuously adjusted. The monitoring report provides important data and impulses for this. However, how successfully it is translated into concrete measures depends not only on the political will of the federal government, but also on the assessment by the Bundesnetzagentur (Federal Network Agency) and the speed of the parliamentary legislative process.