Experienced energy manager is Merz’s “surprise” pick for heading Germany’s economy ministry
The conservative Christian Democratic Union (CDU) of chancellor candidate Friedrich Merz has picked energy industry manager Katherina Reiche as candidate for the country’s next economy and energy minister.
The decision was announced together with picks for six other ministries reserved for the CDU, which emerged as the strongest party in February’s elections. The conservative Bavarian sister party Christian Social Union (CSU) also presented its three ministerial picks.
The conservative alliance’s centre-left coalition partner, the Social Democrats (SPD), is waiting until after a member vote on accepting the aspiring government parties’ coalition agreement, the result of which is scheduled to be announced on Wednesday (30 April).
Reiche’s nomination has surprised many observers, as she left politics ten years ago to pursue a career in the energy industry. The 51-year-old was first elected as a member of parliament for the CDU in the eastern state of Brandenburg in 1998. The trained chemist subsequently served four years as co-leader of her parliamentary faction, four years as parliamentary state secretary in the environment ministry and two years as parliamentary state secretary in the transport ministry. In parliament, Reiche was a staunch advocate of nuclear energy, which she called hard to replace. She also served as member of the Foundation for German-Polish Cooperation during her time as MP.
Switch to the private sector
In 2015, she gave up her mandate in the middle of the term to become head of the German Association of Local Utilities (VKU). As one of the few female top executives in Germany’ energy industry, the mother of three led the lobby group that represents about 1,500 local and regional utilities (Stadtwerke) from across the country, which often are at least partially owned by towns or communities.
Her seamless move from being an MP to becoming the highly paid head of an industry group was criticised by NGO LobbyControl at the time, which said that the “changing of sides without a waiting period is unacceptable.” In 2020, Reiche moved on to become CEO of the newly founded energy service provider Westenergie, a subsidiary of energy company E.ON that labels itself as “engine and trailblazer of the energy transition.” In the same year, she also joined the German government’s National Hydrogen Council (Wasserstoffrat).
Stakeholders welcome Reiche’s energy transition experience
According to news service Table.Media, Reiche’s nomination was received well by economist Veronika Grimm, who is a member of the government’s economic advisory council. She called the decision a “lucky pick” for Merz’s cabinet. Siegfried Rußwurm, former head of the Federation of German Industries (BDI), said Reiche can draw on a “broad background of experience and her ability to innovate,” Table.Media wrote. Just days before she was announced as Merz’s pick for the ministry, business newspaper Handelsblatt reported that Reiche had taken on a position as board member of Swedish energy company Ingrid Capacity.
Simone Peter, head of industry group Renewable Energy Association (BEE), said Reiche is an “experienced” candidate for heading the ministry, who can look back on a career in transforming the energy system. “What’s important now is securing the expansion of renewables in all sectors, a flexibility agenda to balance production and demand in real time and a determined transition in the heating and transport sectors,” Peter added.
The head of the lobby group German Federation of Energy and Water Industries (BDEW), Kerstin Andreae, called Reiche a “proven expert” in the field who would know the challenges required by her assigned new position.
Ministry stripped of climate responsibility
In the new government, the economy ministry will lose its responsibility for climate action. The outgoing government with Green Party economy minister Robert Habeck had made the economy ministry responsible for decarbonisation to better dovetail climate policy measures with industry development.
On her profile on business network LinkedIn, Reiche described her task as CEO at Westenergie as “laying the groundwork for the success of the Paris climate targets – for a livable environment, for the coming generations.” In her own words, “climate action is not a task that we can tackle sometime in the future” but requires immediate action.
During her time as head of utility association VKU, Reiche called for a comprehensive wind power acceleration and acceptance programme in Germany and an increased focus on the energy transition in heating to enable Germany to reach its emissions reduction targets.
In a recent guest article for Table.Media, the designated minister said that every kilowatt hour in the energy system is “a strategic resource.” She called for a better integration of digitalisation and data centres in the energy transition, one of the focus areas of her employer Westenergie, as well as for hydrogen fuel cells for decentralised power supply and baseload power plants for stabilising the energy system.
“The Energy Efficiency Act stipulates that new data centres by 2027 must be operated entirely with renewable electricity. However, legislative ambition must not fail due to physical reality. Base load demand cannot be flexibilised at will,” she argued, adding that “the energy transition is no longer just a climate project – it is a promise for industry locations.”
