Germany Faces Potential Severe Energy Crisis, Warns Recent Study
In a bid to ensure energy security and advance Germany's transition to a sustainable, resilient energy system, the Ministry of Economics, under Katherina Reiche (CDU), has proposed the expansion of flexible power generation capacities with a total capacity of 20 GW by 2030. This ambitious goal represents a 60% increase compared to the previous government's objective of 12.5 GW.
The proposed flexible capacities could encompass gas power plants, storage technologies, battery systems, or other flexibility solutions. However, the Ministry's plans regarding state intervention remain unclear, as the current state of Germany's largest gas storage facility is empty, and the possibility of state intervention has not been ruled out.
PwC's study, released earlier, offers several potential solutions to address the projected supply gap and ensure power grid stability by 2035. These include optimising energy demand through efficiency improvements and smarter consumption patterns, scaling up renewable energy capacity, adopting low-carbon solutions like hydrogen and other clean technologies, investing in sources of flexibility, implementing market and policy reforms, diversifying energy supply, and continued strategic investments in infrastructure.
The study also underscores the importance of investing in storage technologies and other innovative flexibility options such as batteries, hydrogen plants, and pumped storage power plants. Moreover, it predicts a significant energy supply gap in Germany's energy transition by the mid-2030s, emphasising that only such investments can help achieve the ambitious goals of the energy transition and ensure the stability of the German power grid.
Environmental organisations, such as the German Environmental Aid (DUH) and the BUND, have voiced their concerns over additional gas power plants. Instead, they advocate for significantly more investments in renewable energies and storage technologies.
The need for additional flexible capacities is estimated to be at least 40 GW. The critical periods, known as "dark doldrums," during which the energy gap is particularly pronounced, occur when wind and solar power production is low. In such situations, strategic site selection becomes crucial to reduce network bottlenecks and save expensive network expansions.
Recent years have seen several critical situations with extremely high electricity prices, with over 800 euros per megawatt-hour during the winter of 2024/25. As Germany navigates its energy transition, striking a balance between security, sustainability, and affordability will be key.
[1] PwC Study: "Energiewende 4.0 – Flexibilität für die Zukunft" (Energy Transition 4.0 – Flexibility for the Future) [3] Ministry of Economics' reaction to the empty gas storage situation can be found in the press release "Wirtschaftsministerium reagiert auf leere Gaspeicher" (Ministry of Economics reacts to empty gas storage) dated [date].
- The Ministry of Economics, under Katherina Reiche (CDU), aims to enhance Germany's energy security through a 20 GW expansion of flexible power generation capacities by 2030, a 60% increase from the previous government's objective.
- PwC's study suggests multiple solutions to ensure power grid stability, which include optimizing energy demand, scaling up renewable energy capacity, investing in sources of flexibility, implementing market and policy reforms, diversifying energy supply, and continued strategic investments in infrastructure.
- Despite the proposed expansion, environmental organizations like the German Environmental Aid (DUH) and the BUND express concern over additional gas power plants, advocating instead for significantly more investments in renewable energies and storage technologies.
- The projected energy supply gap in Germany's energy transition, according to the PwC study, could be alleviated through investments in storage technologies, hydrogen plants, and pumped storage power plants, among other innovative flexibility options.
- The need for additional flexible capacities is estimated to be at least 40 GW, with critical periods, known as "dark doldrums," particularly pronounced when wind and solar power production is low, necessitating strategic site selection to reduce network bottlenecks.
