a planned industrial electricity price and a power plant strategy.. The announcements, made late Thursday, signal a concerted effort to alleviate economic pressure and bolster Germany’s competitive edge, though they also raise questions about the coalition’s commitment to renewable energy targets and face scrutiny from the European Union.
The industrial electricity price, slated to take effect between 2026 and 2028, aims to provide relief for energy-intensive industries facing international competition. The target price is approximately 5 cents per kilowatt-hour, a significant reduction from current rates for many businesses. While proponents argue it will stimulate growth and safeguard jobs, critics express concern that it will artificially depress electricity prices, disincentivizing investments in renewable energy sources and potentially creating unfair advantages for specific sectors. Negotiations with the European Commission are reportedly nearing completion, but approval remains contingent on ensuring the measure complies with EU state aid regulations and does not distort the internal energy market.
Complementing the industrial electricity price is a strategy to guarantee electricity supply during periods of low wind and solar output. The plan involves the construction of new power plants, with a tender for a total of eight gigawatts of flexible capacity anticipated as early as 2026. These new facilities, expected to be operational by 2031, are intended to bridge gaps in generation, with a long-term vision to transition these power plants to hydrogen fuel. This move represents a clear shift away from previously emphasized reliance on intermittent renewables and has already drawn criticism from environmental groups, who argue it risks locking Germany into fossil fuel infrastructure at a time when the country is striving for carbon neutrality. The decision raises fundamental questions about the coalition’s overall climate strategy and its potential to meet its legally binding emissions reduction targets.
The announcements underscore the ongoing tensions within the coalition government, balancing the immediate need for economic stimulus with long-term environmental commitments. While Chancellor Merz emphasized the initiatives’ role in supporting the German economy and securing its place in the global market, observers remain skeptical about the policy’s true impact and its potential to compromise Germany’s ambition to be a leader in the renewable energy transition. The European Commission’s final assessment of the industrial electricity price and the broader implications of the power plant strategy are expected to be closely watched both domestically and internationally.
