Germany's energy transition: Are costs for customers spiralling out of control?

Published connected 24/10/2025 - 14:43 GMT+2 •Updated 15:06

One successful 5 German municipal power providers scheme to decommission state networks by 2045, while nan national authorities builds 20 gigawatts of caller gas-fired powerfulness plants — conflicting strategies arsenic cities shape retired heating state and nan federation maintains state for energy generation.

According to a study by nan German Association of Local Utilities (VKU), 19% section utilities services scheme to decommission their state web by 2045 astatine nan latest.

Almost half of suppliers, 46%, are still undecided connected whether they want to move their networks to climate-friendly state successful nan early aliases unopen them down completely.

Only 8% person truthful acold made a clear determination to person their grids for backstage households to greenish gas.

Mannheim is peculiarly eager erstwhile it comes to phasing retired gas. According to nan plans of supplier MVV, nan state web is to beryllium decommissioned by 2035.

Augsburg, Hanover and Würzburg are readying to extremity their state proviso by 2040. In Munich and Regensburg, nan state grids are to beryllium unopen down by 2045 astatine nan latest.

At nan aforesaid time, Federal Minister for Economic Affairs and Energy Katherina Reiche announced astatine nan opening of May that gas-fired powerfulness plants pinch a full capacity of "at slightest 20 gigawatts" would beryllium built.

The national scheme views gas-fired powerfulness plants arsenic a transitional technology, pinch nan action to person to hydrogen. The extremity is to usage them erstwhile star and upwind cannot supply capable power successful Germany.

While state will proceed to beryllium utilized for energy procreation astatine nan national level, cities will trim its usage for heating astatine nan municipal level.

EU subsidies are basal to support powerfulness plants moving erstwhile they are not successful use. But nan Ministry of Economic Affairs whitethorn not person arsenic overmuch arsenic it hopes.

According to unofficial information, negotiations are pointing to subsidising a capacity of 12 to 12.5 gigawatts alternatively of 20.

Who will carnivore nan costs?

The German Association of Local Utilities (VKU) is calling for readying certainty to beryllium established quickly and warns that nan costs of dismantling nan grid could beryllium borne chiefly by customers.

VKU Managing Director Ingbert Liebing told nan German newspaper Bild that "anyone who will nary longer beryllium capable to power pinch state aliases lipid successful 2045 must beryllium capable to trust connected affordable alternatives being available. District heating, power pumps aliases greenish gases must beryllium disposable crossed nan committee by past astatine nan latest."

Customers see not only backstage households but besides companies successful Germany, and astir 1.4 cardinal medium-sized companies are connected to nan state distribution network.

Rising gas, energy and worldly prices are already putting unit connected nan profit margins of these companies.

Complex regulations connected taxes, biology requirements, occupational wellness and information and power ratio summation administrative activity and costs.

Moreover, world competitors pinch little labour and accumulation costs are putting medium-sized companies nether value pressure.