#26: Germany's energy mess
High prices, failed climate targets. How did we get here?
German energy policy is a mess.
Obviously, we’re not the only country scrambling to do something about rising fuel prices right now — but here policymakers have done a particularly bad job — for decades.
Both left and right have been guided by particular ideologies and interest groups when it comes to energy.
Leaders from across the political spectrum have allowed Germany to become more vulnerable to global energy shocks than it needs to be.
Germany likes to brag about its climate-friendly policies — but continues to miss its climate targets — and punish consumers with some of the highest petrol and electricity prices in Europe. How did we end up here?
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Nuclear own-goal
I'll start with the left-of-centre parties: the Greens, the SPD, Die Linke.
Just yesterday in an opinion piece in the Guardian, our finance minister Lars Klingbeil (SPD) wrote:
“Those who fantasise about a nuclear revival are a threat to Germany’s sovereignty.”
Nonsense. Killing off nuclear was a terrible idea, especially seen from 2026.
Since the 1970s the Greens have been hellbent on shutting down the country’s 19 commercial nuclear power plants. Plants that were safe and produced zero CO².
The phaseout began with the SPD-Green coalition under the SPD Chancellor Gerhard Schröder in the early 2000s.
The last three nuclear power stations were finally shuttered — great timing — a year after Russia’s 2022 invasion of Ukraine and the sabotage of the Nord Stream gas pipelines.
Just as we were forced to wean ourselves off cheap gas from Putin’s Russia, we decided to shut down our last three operational reactors, extend the lifespans of dirty coal plants and import vast amounts of environmentally destructive LNG from the US and Qatar.
Full disclosure: I used to be a member of Die Grünen and I dabbled in climate activism in the pre-Covid days.
At some point it dawned on me: Germany was shutting down its last nuclear plants before it had a good plan to maintain the baseload on the power grid with just wind and solar. Nuclear was perfect for maintaining the baseload but without it we had to continue running climate-unfriendly coal and gas plants.
Demolition of a nuclear power plant in Bavaria:
Why did we shut down nuclear?
Pure fear.
Fear of a Chernobyl or Fukushima-type accident in Germany.
It was unfounded fear. We weren’t running dodgy old Soviet reactors here; we have no earthquakes in Germany; and when was the last time you noticed a tsunami on the North Sea coast?
Activists point to the unsolveable nuclear waste storage problem. That is and remains an issue but researchers in other countries are finding ways to recycle nuclear waste. It’s by no means an easy problem to solve but progress is being made. In Germany, the funding of research connected to the whole field has dried up.
Wind and solar power are fantastic. When the sun’s shining and the wind is blowing. But you can only build so many turbines without pissing off rural residents who are sick of seeing and hearing them near their homes.
And is covering vast areas of land with solar panels really such a great idea?
Every few months you see headlines like “Germany generated 100 percent of its electricity from renewables today.”
What these stories don’t mention is that when the sun doesn’t shine and the wind doesn’t blow, Germany imports nuclear power from France.
The German “energy transition” isn’t quite delivering what was promised: plentiful, cheap, nuclear-free, climate-friendly power for consumers and industry alike.
Some stats:
Total electricity generation fell from 647 TwH in 2015 to 507 TwH in 2025. Why? A mixed bag of reasons: improved efficiency, economic stagnation, deindustrialisation — and imported nuclear-generated power from France!
In 2015, German nuclear still accounted for 92 TWh — that fell to 0 TwH in 2025.
Electricity generated by burning lignite coal (the dirtiest fossil fuel on the planet) fell from 156 TwH to 74 TwH over the last decade. If we had left nuclear at 2015 levels, we could have completely replaced filthy, ecologically disastrous lignite by now.
On days when there is so much wind and sun that the cost of power drops to zero, producers are compensated by the state to unplug their turbines and solar panels from the grid. Taxpayers and consumers shoulder the cost — to the tune of €1.2 billion per year.
As a result, Germany has the highest household electricity prices in Europe (38 cents/KwH) — naturally industry gets a discount!
The right aren’t off the hook
First off, it was actually the conservative CDU’s Angela Merkel who fast-tracked the nuclear phaseout that the SPD-Green government had set in motion before her. All because of the 2011 Fukushima accident on the other side of the world.
However, my main gripe with the CDU is their obsession with maintaining the combustion engine.
For decades — over a century in fact — Germans made some of the best cars that go brum brum. Innovative, precision-machined motors that run on gasoline or diesel.
Hundreds of companies large and small — employing hundreds of thousands of workers — continue to crank out the complicated pieces of metal that make a Porsche engine growl.
The problem is that the future of cars is electric and everyone knows it. China knows this better than anyone. German brum-brum cars are losing market share as the Chinese mass-adopt Chinese EVs.
Meanwhile, German conservatives and their pals in the auto industry refuse to face the music.
They tried to ward off the shift towards electric with the lie about “clean diesel” — which ended, disastrously, in the biggest business scandal in German history: Dieselgate.
A decade later, conservatives still say we need to be “technologically open” — a euphemism for “let’s keep selling petrol-powered cars for as long as possible”.
Meanwhile, in Norway, 96% of new cars are BEVs (battery electric vehicles). In China that number is 48%. In Germany, it's just 22%, though interest in electric cars is rising rapidly as Donald Trump continues to wage war in the Persian Gulf.
The shift to electric is really happening and there’s nothing Germany can do to prevent it.
Electric cars make sense, from an environmental and energy-sovereignty perspective. Especially if we have renewables and nuclear to power them.
Tax break for drivers
Back to the current energy crisis. We’re not going to manage the shift to electric cars overnight. That takes political will and long-term planning.
But politicians are expected to react RIGHT NOW. To offer normal citizens some relief from the pain at the pump.
And so, the Merz government is axing the tax on fuel by 17 cents per litre for two months, starting May 1.
This latest Tankrabatt is peanuts and no guarantee that fuel costs won’t continue to shoot through the roof. Amazingly, oil companies aren’t required to pass on the rebate to consumers.
It’s the perfect opportunity for the AfD to score points with voters. The pro-car, pro-fossil-fuel, pro-Russian gas, pro-nuclear populist far-right party is thrashing Merz’s CDU/CSU in the opinion polls. The AfD has never been in power so it’s easy for them to blurt out easy solutions but to a lot of people their energy policies appear logical and sane.
The CDU/CSU-SPD coalition better come up with something more substantial to counter the energy crisis. Which is really just an economic crisis — since energy is part of every single thing we consume.
A real cut in taxes and socal contributions for lower and middle income people would be a good start that would go beyond reactive little rebates for drivers.
Other ideas to reduce energy dependence:
Encourage cycling/walking
Make the DeutschlandTicket cheaper
Impose a speed limit on the Autobahn
Reduce taxes on household energy bills not just petrol
And, in the long run, maybe think about getting some mini-nukes up and running — as Bavarian premier Markus Söder suggested in March. Not my favourite politician but he has a point.
Thanks for reading.
Maurice
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💰 Money-Saving Tip of the Week from Smart Living in Germany
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Friends:
There should be speed limits but for the sake of safety and relaxed riding, just like in mostly any other country. Fuel saving is no good reason for a mandatory speed limit. Anyone who wants to save fuel by riding more slowly can do so, and many people do it already.
Great points, I found myself fully aligned with most of them. It often seems that politicians think about energy only in times of crisis, forgetting that Germany is, at its core, a manufacturing country.
On your last point, however, I am less aligned. Electric cars may well be the future, but we should not allow German and European manufacturers to be hollowed out while China takes over in the name of green policies. Recent wars and the US push for reindustrialisation have shown that the strength, and, unfortunately, even the survival, of a nation, or a group of nations, still depends on its ability to manufacture planes, ships, cars, drones, and weapons.
I really much like your newsletters! Thx