“The destabilisation of the German electricity industry”

A series of detrimental external factors and poor strategic reactions have led to a destabilisation of Germany’s electricity industry over recent years, a study conducted by the University of Stuttgart’s Institute for Social Sciences has found. Energy providers in the country faced “negative external pressures”, such as competing renewable energy sources, nuclear and coal exit debates and decreasing electricity prices. Also, the industry was destabilised by “two exogenous shocks”: the financial crisis and Fukushima accident, they explain. The researchers regard repeated poor decision-making by industry representatives, such as underestimating renewables and fighting for nuclear lifetime extension, as responsible for the scale of damage external developments inflicted on their companies: “Utilities underestimated the structural nature of their problems and engaged too late in strategic reorientation activities,” they conclude.

Read the study in English here.

For background, see the CLEW dossier Utilities and the energy transition.