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26 September 2025
Publication series – 3 of 66 Insights
Energy transition 2025: a system under pressure
- Briefing
The energy transition is no longer just a project to expand renewable energies; the entire system is being called into question. The new monitoring report by the Federal Ministry for Economic Affairs and Energy (BMWE) entitled “Energy Transition. Efficient. Action.” offers the first consolidated overview of the status of the transformation, beyond political declarations of intent. The central message indicates that Germany is at a tipping point in the energy transition. Although renewable energies now account for almost 60% of electricity consumption, structural problems lie behind the figures. The report analyses progress but bluntly exposes weaknesses and calls for a change of course, away from individual measures and towards a comprehensively controlled system.
Three core underlying problems
- Expansion is lagging behind demand. The biggest problem is the lack of synchronisation. The expansion of wind and solar energy is progressing, but the infrastructure cannot keep up. Electricity grids, storage solutions and flexible consumption structures are either non-existent or are being developed too slowly. This results in generation without utilisation and high economic costs.
- Focus on generation instead of system control. The report criticises the fact that political control of the energy transition has so far been too focused on expanding capacity. Distribution networks, storage and flexible demand have been neglected. The controllability of the overall system is increasingly at stake. The higher the share of fluctuating energies, the more critical this gap becomes.
- Misguided incentives, complexity, loss of trust. Some subsidy structures are outdated and do not always favour the most efficient technologies. At the same time, there is a lack of reliable price signals to make investments in flexibility, grid and storage technology attractive. The monitoring report warns that without system efficiency, acceptance among businesses and the public is likely to decline further.
A new course of ten key measures for the next phase
In response to the report, the BMWE proposes ten key measures (link). They mark a strategic reorientation and define how the energy transition should be designed in future to be economically viable, technologically robust and market oriented.
- Moving away from individual disciplines towards a systems approach: a technology-neutral capacity market is planned to guarantee security of supply even during periods of low wind and low sunlight. New market mechanisms are to reward flexibility and steer investment. At the same time, the aim is to streamline regulation and review existing subsidy logic.
- Digitalisation and flexibility are coming into focus: load management, smart grids, storage and sector coupling will be considered basic prerequisites for a stable system in the future. Politicians are encouraging innovation whilst CO₂ capture (CCS/CCU) and hydrogen are also to be actively integrated into the future energy architecture.
- Economic efficiency is no longer a side issue: the energy transition is explicitly understood as an economic policy project. Inefficient subsidies are to be phased out and investment incentives designed more systematically. The report emphasises that the energy transition will only remain socially acceptable if it is also economically viable.
Implications for businesses: what matters now
For companies, especially energy-intensive consumers, a new phase of the energy transition is beginning. The political focus on system efficiency and market integration brings new opportunities, but also new requirements.
- Flexibility is becoming a core competence: those who can dynamically control their electricity consumption or provide flexible capacities will be able to profit in new markets in the future, for example in the planned capacity market or by participating in balancing energy markets.
- Efficiency is being redefined: it is no longer enough to simply use renewable energies. Companies that are already investing in storage solutions, sector coupling or optimised use of their own electricity are gaining long-term competitive advantages, including through potential access to subsidies.
- Strategic monitoring is essential: The announced regulatory reforms, from the revision of the subsidy structure to the introduction of new market models, will also affect existing business models. Companies should closely monitor regulatory developments and position themselves early on.
Conclusion: The energy transition is becoming a system test and an economic opportunity
The monitoring report is more than just a review. It is a wake-up call: without strategic realignment, the energy transition risks failing due to its own complexity. The proposed measures focus on reason rather than ideology, on technological openness rather than dogmatism, and on systems thinking rather than isolated politics. For companies, this means that the rules of the game are changing. Those who invest now in intelligent, flexible and marketable solutions are setting the course for competitiveness in the energy system of the future. The energy transition is not a sure-fire success but an evolving task, the success of which depends on entrepreneurial initiative.
In this series
FIDIC – An introduction to the FIDIC Suite 2017
22 October 2025
by Multiple authors
The Renewable Energy Expansion Acceleration Act – a boost for the energy transition in Austria?
23 September 2025
Federal Network Agency discussion paper on reforming grid fees for industry and commerce
25 September 2025
by Multiple authors
German-Dutch Treaty on Cross-Border Energy Projects
18 September 2025
by Multiple authors
Energy communities in Austria and the new Electricity Industry Act (ElWG)
15 September 2025
New amendment to the Energy Industry Act (EnWG) introduced in July and August 2025
8 September 2025
Clean Industrial Deal State Aid Framework (CISAF) – a new state aid framework for the green transformation of industry
8 September 2025
by Dr. Michael Brüggemann, Johannes Schaadt-Wambach, LL.M. (Prag)
Industrial electricity prices: initial assessment and opportunities for businesses
18 August 2025
by Johannes Schaadt-Wambach, LL.M. (Prag), Dr. Markus Böhme, LL.M. (Nottingham)
Regulatory Framework for Transmission System Operators in Germany
18 August 2025
by Multiple authors
Court ruling on the effectiveness of availability guarantees for wind turbines
31 July 2025
New Legal Framework for the Commercial Use of Carbon Capture and Storage (CCS) and Carbon Capture and Utilisation (CCU)
11 July 2025
by Multiple authors
Are offshore wind converter platforms a bottleneck in the energy transition? New German government wants to create production capacities at German shipyards
17 June 2025
by Multiple authors
Speeding up the energy transition - the new German government’s plans for gas and steam power plants and its quest for the right technology for renewable energy
8 May 2025
by Multiple authors
Update - Change of government opens the door to carbon capture and storage and carbon capture and utilisation
17 April 2025
by Multiple authors
The special fund for infrastructure and climate protection - what is next?
10 April 2025
by Multiple authors
Changes to CBAM through Omnibus legislative package
10 April 2025
The role of heat probes in the energy transition: Authorisation procedures and potential
26 March 2025
CJEU judgement on customer installations in accordance with Section 3 No. 24a Law on the Energy Industry EnWG
26 March 2025
by Dr. Markus Böhme, LL.M. (Nottingham), Dr. Christian Ertel
Will the new German government open the door for carbon capture and storage?
26 February 2025
by Multiple authors
Waste heat from data centres - new reporting obligations under the EnEfG
6 February 2025
by Multiple authors
Oman and Belgium Sign Landmark MoU on Green Hydrogen Cooperation
11 December 2024
Decision day: Grid fee exemption in customer systems and energy price brake put to the test
28 November 2024
by Dr. Christian Ertel, Dr. Markus Böhme, LL.M. (Nottingham)
Hydrogen core network - The Federal Network Agency’s strategy for the energy transition
11 November 2024
by Multiple authors
Amendment to the Energy Industry Act: changes for energy supply companies and grid and system operators
18 September 2024
by Dr. Christian Ertel, Dr. Markus Böhme, LL.M. (Nottingham)
Standard Essential Patents: A new challenge for the IoT and smart meter world
10 September 2024
Land acquisition and data protection: The importance of the GDPR when project developers request owner data
18 July 2024
by Dr. Patrick Vincent Zurheide, LL.M. (Aberdeen), Dr. Julia Wulff
Municipalities to share profit in wind turbines and ground-mounted photovoltaic systems
11 July 2024
by Multiple authors
Solar Package I - Overview of Changes to Ground-Mounted and Building-Mounted PV Systems
27 May 2024
Mandatory special charge for open space photovoltaic systems in Brandenburg
21 February 2024
by Multiple authors
A new era for wind energy investments in Hungary
Power Play: Renewable Energy Update
26 January 2024
Updating the National Hydrogen Strategy
6 November 2023
by Dr. Niels L. Lange, LL.M. (Stellenbosch), Dr. Janina Pochhammer
The new CO2 border adjustment mechanism (Carbon Border Adjustment Mechanism - “CBAM”) - first statutory reporting obligations set for January 2024
Power Play: Renewable Energy Update
3 November 2023
New IT security requirements for the energy sector
Power Play: Renewable Energy Update
1 September 2023
by Dr. Paul Voigt, Lic. en Derecho, CIPP/E, Alexander Schmalenberger, LL.B.
Does monument protection hinder the expansion of renewable energies?
Power Play: Renewable Energy Update
16 August 2023
The amending law to strengthen digitisation in the urban land use planning process and the further expansion of renewable energies
Power Play: Renewable Energy Update
6 July 2023
Challenges for data center operators - The federal government’s draft bill for an energy efficiency act
Power Play: Renewable Energy Update
12 April 2023
by Multiple authors
The Energy Charter Treaty in the Light of the Electricity Price Brake: An opportunity for investors to litigate?
27 January 2023
Ordinance for Determining Critical Infrastructures (KritisV): Renewable energy plants as critical infrastructure and requirements for IT protection
Power Play: Renewable Energy Update
12 July 2022
by Dr. Paul Voigt, Lic. en Derecho, CIPP/E, Dr. Markus Böhme, LL.M. (Nottingham)
Liquefied Natural Gas Projects in Germany: The LNG Acceleration Act
Q&A series: Energy & Infrastructure
10 June 2022
Participation of local municipalities in the context of wind and photovoltaic projects
Power Play: Renewable Energy Update
5 May 2022
Renewable Energy Wrap-Up – France
Power Play: Renewable Energy Update
27 April 2022
Renewable Energy Wrap-Up - United Kingdom
Power Play: Renewable Energy Update
15 March 2022
Building energy performance: the revised Energy Performance of Buildings Directive
Power Play: Renewable Energy Update
14 February 2022
Fit for 55 – Hydrogen and the Reform of the European Gas Market
Power Play: Renewable Energy Update
11 January 2022
Renewable Energy Wrap-Up – Netherlands
Power Play: Renewable Energy Update
2 December 2021
Renewable Energy Wrap-Up – Poland
Power Play: Renewable Energy Update
21 September 2021
by Olav Nemling
Renewable Energy Wrap-Up – Austria
Power Play: Renewable Energy Update
18 August 2021
Renewable Energy Wrap-Up - Germany
Power Play: Renewable Energy Update
12 July 2021
Floating Foundations for Offshore Wind Farms
Power Play: Renewable Energy Update
8 June 2021
Species protection exemption: Significance for wind energy
Power Play: Renewable Energy Update
25 May 2021
Power-to-Hydrogen
Power Play: Renewable Energy Update
6 April 2021
Focus PV – Floating Solar and Agrivoltaics
Power Play: Renewable Energy Update
23 March 2021
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