Energiewende (Energy Transition) · Glossary

Energiewende refers to the far-reaching transformation of the energy supply. Fossil structures, and in Germany nuclear ones as well, are being replaced by a climate-compatible, renewable, efficient and more heavily electrified supply. The term does not mean a single measure or a single expansion target. It describes the change in a technical, economic and institutional system that provides electricity, heat, mobility and industrial process energy.

In narrower German usage, the Energiewende stands for three things: the expansion of renewable energy, the phase-out of nuclear energy and the reduction of greenhouse gases. For today's energy policy practice, this description is no longer sufficient. The transformation affects generation plants, electricity grids, heating networks, storage, flexible consumers, buildings, vehicles and industrial processes. It also affects market rules, permitting procedures, financing and responsibilities. Anyone who looks only at new generation plants overlooks the area where most conflicts arise: integrating these plants into an ongoing supply operation.

The central task remains the same: energy should be reliably available, affordable and environmentally compatible. What changes are the means. Fossil energy systems rely on storable fuels, central power plants, international commodity trading and ongoing fuel costs. A renewable and electrified supply relies more on capital-intensive plants, weather-dependent generation, grids, digital control, storage and flexible demand. In addition, responsibility is being redistributed among the state, the market and infrastructure operators.

Legal framework in Germany

The Federal Climate Change Act (Bundes-Klimaschutzgesetz, KSG) gives the climate targets of the German Energiewende a statutory framework. Under § 3 KSG, greenhouse gas emissions are to fall by at least 65 percent by 2030 and by at least 88 percent by 2040 compared with 1990. Net greenhouse gas neutrality is to be achieved by 2045, and after 2050 emissions are to become negative. These targets apply to the whole economy and not only to the electricity sector.

For the electricity sector, the Renewable Energy Sources Act (Erneuerbare-Energien-Gesetz, EEG 2023) applies. It states as its aim a greenhouse-gas-neutral electricity supply based entirely on renewable energy. By 2030, renewable energy is to cover at least 80 percent of gross electricity consumption. The share is measured against consumption and not against generation. If electricity consumption rises through electrification, larger renewable electricity volumes are needed for the same share.

The nuclear phase-out is complete. On 15 April 2023, the last three nuclear power plants were shut down: Isar 2, Emsland and Neckarwestheim 2. Because of the energy crisis, they had previously continued operating in a time-limited extended operation beyond the originally planned end in 2022. Since then, the Energiewende in Germany has had to deal mainly with the gradual coal phase-out and the declining use of natural gas and mineral oil.

The targets and instruments are amended regularly. Anyone who wants to check specific obligations, funding conditions or deadlines for a particular plant must consult the version of the law currently in force. General descriptions of targets are not sufficient for this.

The Energiewende is more than electricity generation

The most visible part is the expansion of wind energy and photovoltaics. Both supply electricity without ongoing fuel costs and with very low direct greenhouse gas emissions. However, they change how the electricity system works, because their generation depends on weather, time of day and season. A conventional power plant can be operated according to a schedule within technical limits. A wind turbine delivers when the wind blows. A photovoltaic system delivers in daylight, especially strongly at midday in the summer half-year. This is not a defect, but it requires different forms of coordination.

Feed-in and withdrawal of electricity must match at every moment so that frequency and grid stability are maintained. Annual volumes in terawatt hours show how much electrical energy is generated or consumed. But they say little about whether the electricity is available at the right place at the hour of need. For the Energiewende, several quantities therefore matter at the same time: installed capacity in gigawatts, energy generated in terawatt hours, firm capacity, grid connection capacity, storage levels, load profiles and regional bottlenecks. Anyone who looks at only one of them sees only a part of the picture.

In the past, generation largely followed demand. With high shares of weather-dependent generation, generation, grids, storage and demand have to be controlled together. As a result, terms such as flexibility, residual load, redispatch, grid expansion and load management become central. The question is then not only how much renewable electricity is produced per year. It is also how a specific consumption at a specific time in a specific place can be met.

Energy, electricity, final energy and primary energy

A common misunderstanding equates the Energiewende with rising electricity volumes. Its aim is to consume fewer fossil energy sources. Electricity consumption can rise while total energy use falls. This is due to the differing efficiency of technologies and to which energy quantities one looks at.

Final energy is the energy that reaches the consumer, such as electricity from the socket, natural gas in a building or petrol in the tank. Primary energy is the energy contained in natural energy carriers or sources before conversion losses occur. Fossil power plants, boilers and combustion engines lose a large part of the energy used as waste heat. Heat pumps and electric motors use electrical energy considerably more efficiently. An electrified heating or mobility application therefore often needs less final energy than the fossil application it replaces.

A heat pump does not convert electricity into heat one to one. It uses electricity to raise ambient heat from air, ground or water to a higher temperature level. From one kilowatt hour of electricity, several kilowatt hours of heat are thus obtained. How many depends on the heat source, flow temperature and building. An electric car converts electrical energy into motion in its drive considerably more efficiently than a combustion engine converts the chemical energy of the fuel. More electricity consumption can therefore go hand in hand with lower fuel consumption, less waste heat and lower emissions.

A single consumption figure is therefore not enough to assess the Energiewende. What matters is which fossil fuels are replaced and which emissions are thereby avoided. It also matters which grids have to be expanded for this and whether the additional electricity is available at the right time and place. Electrification shifts energy flows into the electricity sector. It does not automatically solve all infrastructure questions, but it makes many fossil losses avoidable.

Distinction from decarbonisation, electricity transition and electrification

Decarbonisation means reducing or avoiding carbon dioxide and other greenhouse gases. It is an aim of the Energiewende, but not the same thing. An energy supply can in principle also be decarbonised without fully renewable sources, for example through nuclear energy or through fossil processes with capture and storage of CO₂. In Germany, nuclear energy is ruled out as an option. Conversely, not every renewable use is automatically climate-compatible, for example where supply chains, land-use effects or inefficient applications are ignored. In practice, renewable energy, efficiency and direct electrification are the focus.

Stromwende (electricity transition) refers to the transformation of electricity generation and electricity system operation. It is a part of the Energiewende, but not its entire content. Heat, transport and industry cause large shares of energy consumption and emissions. If oil, gas or coal continue to be used there, the Energiewende remains incomplete, even if the electricity mix becomes increasingly renewable.

Electrification means switching applications to electricity, for example through heat pumps, electric vehicles, electric process heat or electrolysers. It is a central means of the Energiewende, but not an end in itself. It is most effective where electricity can be used directly. Some applications are difficult to electrify directly, such as very high temperatures, basic chemicals, long-term storage or certain transport services. Hydrogen, synthetic energy carriers or biomass come into consideration there. These pathways have higher conversion losses and must therefore be prioritised carefully.

Why weather-dependent generation needs different rules

Wind energy and photovoltaics have low variable costs. Once the plants are built, each additional kilowatt hour costs hardly any fuel. In electricity markets with marginal-cost pricing, this lowers the exchange price in many hours, especially at high feed-in. At the same time, the requirements for balancing, grid operation and investment security increase. Price formation, grid charges, support schemes and capacity provision must cope with plants whose costs arise predominantly before the first kilowatt hour.

This changes the incentives for investment. In a fossil system, fuel costs are visible on an ongoing basis. In a renewable system, costs show up more as capital, grid connection, financing and integration costs. A low exchange price in a windy or sunny hour does not mean that supply is free of charge. It only shows that in that hour a lot of generation with low variable costs is available. Plants, grids, reserves and control continue to cost money and are refinanced through other mechanisms.

Political and regulatory questions arise from this:

Who bears the costs of grid connections?
How are grid charges distributed?
What revenues secure plants that are needed only a few hours a year?
How are flexible consumers rewarded when they use electricity during abundant supply?
How are local grid bottlenecks reflected in the market rules?

The Energiewende is therefore also a reform of rules that were originally created for other generation and consumption patterns.

Security of supply under changed conditions

Security of supply does not mean that every single plant is available at all times. It means that generation, grids, storage, imports, reserves and controllable demand together reliably cover demand. In a renewable electricity system, it relies less on fuel stocks at the power plant. It relies more on diversity, spatial balancing, flexibility and firm capacity.

A widespread misinterpretation is that renewable energy, because of its weather dependence, cannot play a supporting role in a secure supply. This statement confuses individual plants with a coordinated system. A single photovoltaic system delivers no electricity at night. A system of wind energy, photovoltaics, hydropower, biomass, storage, flexible loads, grids, imports and reserves can nevertheless run reliably if the necessary capacities and rules are in place. The challenge is to manage periods of dark doldrums (Dunkelflauten), seasonal differences, regional bottlenecks and forecast errors in a plannable way.

The opposite claim is equally imprecise, namely that the expansion of renewable energy alone guarantees security of supply. Even a country that generates over the year as much renewable electricity as it consumes may need imports, storage or reserves in individual hours. Security of supply is a question of capacity and availability, not only of volumes.

Firm capacity can come from different sources: from controllable power plants, sufficiently long-duration storage, flexible loads, load-shedding agreements, European balancing and, in future, possibly from power plants that can be operated with hydrogen. How these options are to be assessed depends not only on the technology. Market rules, permits, fuel availability, grid connections and the question of who pays for provision also matter.

Grids as a prerequisite, not an afterthought

The Energiewende changes the spatial organisation of supply. Fossil power plants were often located close to consumption centres, industry or fuel logistics. Wind energy is generated where there is a lot of wind, often on the coast, at sea or in the countryside. Photovoltaics is spread across roofs, open land and commercial sites. This creates new electricity flows between regions and voltage levels.

The electricity grid is not just a line between generation and consumption. Only this infrastructure makes simultaneous feed-in and withdrawal physically possible. Bottlenecks in the transmission grid can mean that renewable electricity in the north is curtailed while conventional power plants in the south have to ramp up. Bottlenecks in the distribution grid can limit the connection of photovoltaic systems, heat pumps, charging points or battery storage. In both cases, the problem is not the amount of energy but the grid capacity at the right time in the right place.

Grid expansion therefore cannot be dealt with afterwards. It determines how much renewable generation is usable, how quickly new consumers are connected and how expensive congestion management becomes. At the same time, grid expansion takes a long time, requires land and involves complex permitting. This time span often fits poorly with political expansion targets or with the investment decisions of households and companies.

Digital control cannot replace grid expansion, but it can make existing capacities more usable. This includes smart metering systems, controllable consumption devices, dynamic tariffs and grid-serving operation. For this, incentives, data protection, standards and responsibilities must be clarified. A heat pump or an electric car becomes a flexible resource only when controllability, comfort requirements, electricity tariff and grid needs fit together.

Storage, flexibility and the importance of time

Storage is often described as a general solution for fluctuations. This is too imprecise, because storage performs very different tasks. Battery storage balances short-term fluctuations, increases self-consumption, relieves grids or supplies balancing energy. Pumped storage shifts energy over hours to days. Heat storage makes electricity indirectly usable in heat supply. Hydrogen storage could bridge seasonal gaps once electrolysis, transport, storage and reconversion to electricity have been built up.

What is decisive is which storage makes sense for which duration, at which location and with which efficiency. A household battery solves different problems than a large-scale storage unit at the grid connection point of a solar park. Storage earns money through price differences, system services, grid relief or contributions to security of supply. If these services are not remunerated or recognised in regulation, even a technically sensible investment remains economically uncertain.

Flexibility is broader than storage. Demand can shift consumption without temporarily storing energy. An electric car usually does not have to charge in the exact minute it is plugged in. A heat pump with a heat store can run earlier or later for some time. Industrial processes can under certain circumstances shift loads. Flexibility therefore arises not through devices alone, but also through rules, contracts and control options.

With high shares of renewable energy, the timing of consumption becomes more valuable. As a quantity of energy, a kilowatt hour is always the same size. For the electricity system, however, it makes a big difference whether it is consumed in a sunny midday hour, on a low-wind winter evening or during a grid bottleneck.

Heat, transport and industry

Buildings need space heating and hot water, and industry needs process heat at very different temperature levels. The switch to heat pumps, renewable heating networks, solar thermal energy, geothermal energy, waste heat and biomass changes buildings, grids, skilled-trades capacity, municipal planning and investment cycles. Heat pumps increase electricity demand but reduce fuel use. Their effect depends on building condition, flow temperature, heat source, electricity price and grid connection. Building renovation does not replace renewable heat. But it can reduce the required heating capacity, the winter electricity load and operating costs. Municipal heat planning is intended to determine where heating networks and where individual solutions make sense.

In transport, electromobility shifts energy from the mineral oil market into the electricity system. Electric vehicles are more efficient than combustion vehicles. But they need charging infrastructure, grid connections, land, billing systems and suitable price signals. If many vehicles charge simultaneously at high power, this can aggravate grid problems. If charging times are shifted or vehicles are used bidirectionally in future, however, they can provide flexibility.

Many industrial processes need high temperatures, constant availability or particular chemical properties of energy carriers. Direct electrification can replace large parts of this, for example with electrode boilers, electric arc furnaces or high-temperature heat pumps. For steel, chemicals and refineries, hydrogen becomes important, above all as a chemical reactant. But hydrogen is not a universal substitute for natural gas. Its production from renewable electricity needs additional generation, electrolysers, water, transport infrastructure and storage, and every conversion costs energy. The order in which applications are supplied therefore matters.

Costs, prices and distribution

Fossil supply causes ongoing costs for fuels, import dependence, emissions and environmental damage. Renewable supply requires high initial investment in plants, grids, storage, control and efficiency. An electricity price in a single year therefore does not show whether a supply pathway is cheaper in the long term. It shows only how procurement, taxes, levies, grid charges, surcharges, distribution and market conditions interact at that point in time.

System costs comprise more than the generation costs of individual technologies. They include grid expansion, reserves, balancing energy, redispatch, storage, connections, financing and, where applicable, emission or fuel risks. A technology comparison is reliable only if it is clear which costs are included and which are shifted to other actors. Conversely, the costs of the Energiewende are overstated if replacement investments in ageing infrastructure that are needed anyway are attributed entirely to climate protection.

Prices cover costs, create incentives and distribute burdens. A low exchange price relieves consumers but can make investment more difficult. High electricity prices promote efficiency but can slow electrification if electricity is burdened too heavily compared with fossil fuels. An example of such a shift: in Germany, the EEG support costs were formerly passed on to the electricity price via the EEG surcharge (EEG-Umlage). Since 1 July 2022, the surcharge has been zero, and at the end of 2022 it was abolished. Since then, the federal budget has balanced the EEG account. The costs are thus borne by taxpayers instead of electricity customers, and they depend on budget decisions.

Distributional conflicts are part of the Energiewende because infrastructure becomes visible and costs arise unevenly. Wind farms stand in particular municipalities, lines cross particular regions, grid charges burden consumers differently, and industrial electricity prices influence location decisions. Pointing to climate targets does not make these conflicts disappear. They must be addressed through participation, planning certainty, compensation and comprehensible rules.

Institutions, responsibilities and planning

The Energiewende requires coordination between many levels. The European Union sets the framework for emissions trading, the internal energy market, state aid law, efficiency and expansion targets. The federal government regulates central laws, support, grid expansion planning and market organisation. The Länder determine spatial planning, permitting practice and parts of land designation. Municipalities decide on urban land-use planning, heat planning, land and local grids. Grid operators plan and operate the infrastructure, and the regulatory authorities set revenue frameworks and grid access.

These responsibilities do not automatically follow the same timetable. A wind farm may be permitted before the grid connection is ready. An industrial company may want to electrify but does not get the necessary connection quickly enough. A municipality plans a heating network while owners are already renewing their individual heating systems. Planning here does not mean centrally determining every investment. It is meant to set reliable guardrails so that decentralised decisions fit together. If such guardrails are missing, expensive interim solutions, duplicate infrastructure or blocked connections threaten.

Typical misinterpretations

Equating it with the addition of renewable electricity generation: More wind and solar power is necessary, but does not automatically solve grid bottlenecks, winter loads, industrial process heat or questions of the building stock.
Equating it with self-sufficiency: Renewable energy reduces dependence on fossil imports. But electricity trading, European grids, raw materials, hydrogen imports and supply chains remain important.
A shortened view of security of supply: A renewable system is not inherently unstable, nor does firm capacity become superfluous at high annual shares.
A shortened view of costs: The Energiewende is neither merely a cost driver nor nearly free of charge. A reliable cost calculation discloses which system boundary it chooses.
Linear pace: Photovoltaics can be added quickly. Transmission grids, building renovation, industrial plants and skilled labour, by contrast, take years to decades. Bottlenecks show where sequencing and coordination are lacking.

What the term makes visible and what it does not

The term Energiewende shows that energy supply is more than a collection of power plants. It connects technical infrastructure, market organisation, political steering and everyday use. It also makes clear that costs and benefits arise at different times. The investments come early, while the avoided fuel imports and emissions take effect over many years.

The term does not by itself explain which concrete measure makes sense. It can mean very different pathways: more decentralised or more centralised, with a lot of direct electrification or with more synthetic energy carriers, with stronger grid expansion or with more local flexibility. For every use, it must therefore be clarified which sectors, periods, technologies, costs and which region are meant. The term is precise when it names the interplay of generation, consumption, grids, storage, markets and responsibilities. It becomes imprecise when it serves only as shorthand for more renewable electricity or as a catch-all word for every energy policy measure.

Sources

Bundes-Klimaschutzgesetz (KSG) § 3 Nationale Klimaschutzziele — Bundesministerium der Justiz / Bundesamt für Justiz; unbekannt. § 3 Abs. 1 und 2 KSG
Gesetz für den Ausbau erneuerbarer Energien (Erneuerbare-Energien-Gesetz – EEG 2023) — Clearingstelle EEG|KWKG (Gesetzestext nach gesetze-im-internet.de); 2023-05 (Textstand). § 1 Abs. 1 und 2 EEG 2023
Ausstieg Atomkraft — Bundesamt für die Sicherheit der nuklearen Entsorgung (BASE); unbekannt. Abschnitt zu den Laufzeiten der letzten Atomkraftwerke
Glossar: EEG-Umlage — Bundesministerium der Finanzen; unbekannt. Glossareintrag EEG-Umlage

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Edited by eCMS on 11.11.2026 19:46