Vote25: Next gov't must bring Germany to digital age to enable flexibilisation – energy market association
***Please note, this interview is part of CLEW's 2025 preview series, covering the German national election and relevant climate and energy topics in Europe. Read all interviews here.***
CLEW: In your opinion, what effect has the premature end of Germany's traffic light coalition had on the progress of key energy and climate policy projects? Which areas are particularly affected and where would reaching agreements be most urgent before the formation of a new government?
Robert Busch: The coalition government implemented several pioneering projects in the energy sector. However, some of these have been left unfinished due to the coalition’s sudden collapse. It is important for companies and consumers that these are resolved as quickly as possible.
The amendment to the Electricity and Energy Tax Act, for example, is at risk of falling by the wayside, which would be regrettable in many respects. These include new regulations on PV electricity peaks, including stipulations on direct marketing, simplifications for electricity storage and flexible grid connection agreements. There are also amendments to the Metering Point Operation Act. Since, from the bne's point of view, this is mainly a deterioration in an area that is poorly regulated, there is no need to rush at this point.
The Power Plant Security Act also appears to have fallen by the wayside. The bne is critical of this law because it is a planned funding programme for gas-fired power plants.
How do you assess the work of the coalition with regard to the goals agreed in the coalition agreement in energy and climate policy? In your opinion, what role did external factors such as the energy crisis and the war in Ukraine play in this, and where does the coalition itself bear particular responsibility?
The former government has actually implemented many of the energy and climate policy projects agreed in the coalition agreement. For example, it has drastically accelerated the expansion of renewable energies by removing many hurdles. There have also been improvements in storage, which is reflected in the current boom. One of the coalition's major achievements was to secure the energy supply after the Russian attack on Ukraine, despite the country's heavy dependence on Russian gas – although this did tie up a large number of ministry staff.
The work of the coalition partners was made more difficult by the ruling of the Federal Constitutional Court on the budget, which severely restricted the financial leeway and thus the political options. The coalition government is to blame for not adequately deregulating and reorganising the digitisation process, which had already failed under its predecessors.
The next government will probably not be able to take office until spring 2025 at the earliest – what energy and climate policy challenges will then have to be tackled with particular urgency?
The new federal government should focus on planning security and thus on continuity in its energy and climate policy goals.
The energy transition can be kept on track by further reducing obstacles and hurdles. These relate, for example, to renewable energies, storage, grid connections and grid expansion.
The top priority is the restart of digitisation. What has long been working in other EU countries should also be possible in Germany. But so far, the country is among the last in a European comparison to roll out smart meters. It is clear that flexibility can only be achieved with a functioning digitisation process. So, a radical simplification of the technical requirements for smart meters is needed, while ensuring data security and data protection. Furthermore, the smart meter rollout should be organised competitively again.
The traffic light coalition had planned to set up an expensive capacity mechanism to ensure a secure electricity supply. This is the wrong approach. Instead of a planned economy approach, the new government should focus on further developing the electricity market by means of an extended hedging obligation.
Beyond the federal election: What topics or events do you expect will be important for the national and international climate and energy debate in the coming year?
It is to be expected that, under the new U.S. administration, geopolitical issues will play an increasingly important role in energy and climate policy. The new U.S. presidency will also influence the new EU Commission's future climate and energy debate.
The new German government will have to deal with the introduction of the EU Emissions Trading System (ETS II) for the building and transport sectors during the next legislative period. It will also have to transpose the revised Industrial Emissions Directive into national law. This directive contains new rules for reducing harmful industrial emissions.
