Clean Energy Wire reports that the new German economy and energy minister, Katherina Reiche, has said that Germany had to “find a new agreement on the fundamentals” to run a freer energy market and achieve more innovation in the sector, with energy security being the highest priority. The blackout on the Iberian peninsula showed how vulnerable an electricity system can be she said. We must prepare ourselves for minimising risks of this kind. While the expansion of wind and solar power had allowed Germany to make progress on climate action, “systemic risks and costs have been underestimated.” At her inaugural address in the ministry, Reiche said the country therefore needed a “reality check” in energy policy, to ensure that further expansion of renewable power sources is better aligned with grid expansion.
She argued that “renewable energy sources alone will not be able to reliably and affordably supply an industrialised nation like Germany with electricity” and added that the planned auctions for up to 20 GW of new gas-fired power plant capacity would be launched quickly. At the same time, the country would have to allow for a greater role of carbon management (CCS/CCU). Reiche stressed that she would work to implement agreements made in the governing coalition treaty, including a new approach on decarbonising the heating sector “with flexible rules based on long-term CO2-reduction,” the introduction of an industry power price and the use of reserve power plants to stabilise prices instead of only guaranteeing grid stability. “We’re aware that this means a lot of work” at the EU level, she added.
The new minister added that Germany faced “very big” challenges to revive its flailing economy. “All major industries are going through a comprehensive transformation,” Reiche argued, while high taxes, energy and labour costs, and extensive bureaucracy would slow down companies in competition on international markets. The new minister said that Russia’s war, as well as the trade policies of the US government under president Donald Trump, added to the country’s economic troubles, but stressed that the root cause of the country’s problems “is ‘made in Germany’.” At the same time, she added, “this means that the solution can also be ‘made in Germany’.” She said her approach would be “a policy that does not primarily rely on regulation but on activation and letting market participants assume responsibility for themselves.”
