Crisis of Energy Transition in Germany

This article focuses on the crisis in the German energy sector unfolding since the second half of 2021 in the general context of the recession experienced by the German economy. The authors show that one of the reasons for the recession was the mistakes of regulators who set the speed of transition to an energy system based on new renewable energy sources too high. Since 2022, the energy and general economic crisis has deepened as a result of the exogenous shock generated by the geopolitical crisis around Ukraine. The federal government’s response to the growing crisis was to radicalize the energy transition. The coming to power of the new ruling coalition, who just started its work, accelerated the process of destroying the basic components of the former German economic model. Despite the fact that the main elements of the climate and energy strategy have remained unchanged so far, the former maxim ‘energy policy is a climate policy’ is quickly replaced by another one – energy policy should ensure the global competitiveness of the German economy. Based on the analysis of statistical and factual data, it is concluded that, firstly, the new government intends to rationalize the energy transition strategy by increasing the introduction of market principles in the sector of new renewable energy sources; secondly, a lifeline has been thrown to large-scale industry in the form of subsidizing electricity prices; thirdly, planned capacity construction volumes have been increased in the gas-fired electric power industry. The authors stress that Germany will also try to find a balance between the policy of militarization of the economy and energy transition, especially since both of these areas of development are more likely to compete for financial resources. In the medium and long term, the policy of rationalizing energy development is highly likely to create prerequisites for accelerating the energy transition in a more sustainable regime.