German Chancellor: "Phasing Out Nuclear Power Was a Serious Strategic Mistake"... What Went Wrong With the Energiewende? [Energy Odyssey](19)

IV. How to Safeguard Energy Sovereignty
"If We Don't Correct Course, We'll Be Heading for Ruin"... Energy Transition Policy Faces Revision
Renewables Surge, but Costs Rise Too
Phasing Out Nuclear Power Also Threatens Energy Security
Warning: "Phasing Out Nuclear and Thermal Power Together Could Disrupt Electricity Supply"

Editor's NoteAmid supply chain disruptions caused by recent conflicts in the Middle East and the government's mega-projects, energy has become more important than ever. With South Korea relying on overseas sources for most of its primary energy, it faces the difficult task of achieving energy security, carbon neutrality and economic growth at the same time. In this series, reporters covering energy developments on the ground will examine a range of pressing issues and explore possible solutions.

German Chancellor Friedrich Merz delivers a keynote address at the German Asia-Pacific Business Conference at the Grand InterContinental Seoul Parnas in Gangnam-gu, Seoul, on Oct. 30, 2026. Yonhap News

At a New Year's reception for business leaders held on Jan. 14 this year in the central-eastern German state of Saxony-Anhalt, German Chancellor Friedrich Merz took the podium to deliver a keynote address. With a serious expression, he declared, "We are currently pursuing the world's most expensive energy transition," adding, "I have never seen a country carry out an energy transition (Energiewende) as difficult and costly as Germany's."

Chancellor Merz's bombshell remarks did not end there. "Phasing out nuclear power plants was a serious strategic mistake," he said. "We should have kept Germany's last remaining nuclear power plants running for at least three more years to preserve the electricity-generation capacity we had."

Germany had long been viewed as a model country for successfully pursuing an energy transition. But the world's attention turned to Germany when its top leader admitted that the country's energy policy had problems.

His "self-criticism" of the energy transition policy grew increasingly forceful. In a speech a month later, on Feb. 18, he said, "If we do not correct the energy transition now, we will be heading for ruin."

Chancellor Merz stressed, "We cannot do everything with light, sun and wind alone. We need baseload power generation, which is why Germany is building new power plants." Why has the German chancellor been so outspoken in his criticism of the Energiewende policy?

Renewables' share of power generation rises to 57.3%

Energiewende is the German word for energy transition. It also refers to Germany's long-term national policy of shifting its energy system from one centered on nuclear power and fossil fuels to one focused on renewable energy and energy efficiency.

Under this policy, Germany has rapidly pursued a transition toward renewable energy. According to Germany's Federal Statistical Office, renewables accounted for 57.3% of the country's total power generation in 2025. Fossil fuels accounted for about 38.3%, while nuclear power accounted for 0%. By source, wind power had the largest share at 26.3%, followed by solar at 18.1%, natural gas at 17.0% and lignite at 14.6%.

Compared with 2019, the share of renewables rose by 17.4 percentage points over six years, from 39.9%. Meanwhile, nuclear power, which accounted for 12.3%, came to a complete halt in April 2023, making Germany a nuclear-free country. Among fossil fuels, lignite's share fell by 4.1 percentage points, while natural gas's share rose by 2.3 percentage points.

Driven by decarbonization policies, including the expansion of renewable energy, Germany's greenhouse gas emissions fell 48%, from 1.253 billion tons in 1990 to 649 million tons in 2025. Germany aims to achieve carbon neutrality by 2045. As an interim target, it plans to increase renewables' share of electricity consumption to 80% by 2030.

Germany also aims to expand solar power capacity to 215 GW, onshore wind capacity to 115 GW and offshore wind capacity to 30 GW by 2030. It also plans to increase electrolyzer capacity for hydrogen production to 10 GW.

Electricity bills are a burden... second-highest in the EU

Germany's energy transition has not brought only positive outcomes. Above all, it comes at an enormous cost. As Germany rapidly expanded renewable energy while phasing out nuclear power, the burden on the public grew. In its "Energy Policy Review: Germany 2025," published in April 2025, the International Energy Agency (IEA) also noted that "German consumers face some of the highest electricity prices in Europe."

This is reflected in actual electricity prices. According to Eurostat, the European Union's (EU) statistics office, the average household electricity price in Germany in the second half of 2025 was 38.69 euro cents per kilowatt-hour (kWh), the second-highest among the EU's 27 member states.

Electricity prices excluding taxes were also the third-highest, at 22.64 euro cents per kWh. These prices were 33.6% and 23.2% above the respective EU averages. Chancellor Merz's remark that "I have never seen a country carry out an energy transition as difficult and costly as Germany's" was not entirely an exaggeration.

One reason for Germany's high electricity prices is the enormous cost of investing in the power grid. Germany generates a large amount of electricity in the north, where wind resources are abundant, but manufacturing facilities with high electricity demand are also concentrated in the south and west. The country needs to expand its transmission network to carry renewable electricity over long distances. It has also had to expand its distribution network to connect the growing amount of solar power to the grid.

In its 2025 report, the IEA noted that "Germany has relatively high grid fees compared with other countries" and "plans to significantly expand its transmission and distribution networks, including facilities to accommodate offshore wind power." The report estimated that expanding both networks would cost more than 400 billion euros (approximately KRW 606 trillion).

Until 2022, the public directly shared the cost of renewable energy facilities in Germany. When Germany enacted the Renewable Energy Sources Act (EEG, Erneuerbare-Energien-Gesetz) in 2000, it expanded and formalized a feed-in tariff (FIT) system guaranteeing renewable energy producers a fixed purchase price for 20 years. The system compensates producers for the difference between the guaranteed price and the market price.

Germany covered these costs mainly through the EEG surcharge added to electricity bills, and the amount was enormous. In 2017, the surcharge reached 6.88 euro cents per kWh. For a household using 300 kWh a month, that amounted to 20.64 euros (KRW 31,000) per month.

A 2023 analysis by German bank Berenberg found that cumulative costs incurred to support renewable power generation from the introduction of the Renewable Energy Sources Act in 2000 through 2022 exceeded 294.5 billion euros (approximately KRW 446 trillion). As the burden grew, Germany abolished the EEG surcharge on electricity bills in July 2022 and began funding related support through the federal budget.

As the ongoing support for renewable energy increased the burden, the Merkel government introduced a competitive bidding system for renewables in 2017, shifting to a policy designed to lower costs.

The Energiewende's roots in the anti-nuclear movement

Germany's Energiewende has its roots in the anti-nuclear and environmental movements that began in the 1970s. Germany was once a nuclear power. Its nuclear era began in 1961, when the Kahl nuclear power plant in Bavaria, West Germany, began commercial operations. Germany expanded nuclear power to meet rapidly growing industrial electricity demand. When the oil shocks hit the world in the 1970s, Germany built even more nuclear power plants to reduce its dependence on oil.

At the same time, however, an anti-nuclear movement was taking root. In particular, when plans to build a nuclear power plant were announced in 1973 in Wyhl, a small town famous for wine production, local residents, farmers and students strongly opposed the project. They occupied the planned site and began a protest encampment.

After years of persistent resistance from residents, Germany eventually scrapped the Wyhl nuclear power plant project in 1983. The success of the anti-nuclear movement in Wyhl inspired similar campaigns in other regions and helped pave the way for the founding of the Green Party.

In this process, the term "Energiewende" was first used in a 1980 publication, "Energy Transition: Growth and Prosperity Without Oil and Uranium" (Energiewende - Wachstum und Wohlstand ohne Erdol und Uran), by the Oeko-Institut, a German nonprofit research institute established in 1977. The term later became established as the name for the German government's major energy transition policy.

The 1986 Chernobyl disaster fueled opposition to nuclear power across Europe. Germany's political landscape also began to change. Public opposition to nuclear power strengthened the Green Party's position. After winning 6.7% of the vote in the 1998 general election, the Greens succeeded in forming a federal coalition government with the Social Democratic Party (SPD), known as the "Red-Green coalition."

During coalition negotiations, the SPD and the Greens agreed to phase out nuclear power. In 2000, Chancellor Gerhard Schroeder of the SPD-Green coalition announced that nuclear power plants would be gradually shut down by 2022. The Renewable Energy Sources Act (EEG) was introduced that same year, and legislation related to the nuclear phaseout took effect in 2002.

When the center-right Christian Democratic Union (CDU) took power in 2009, Chancellor Angela Merkel decided to reconsider the nuclear phaseout in its entirety. In 2010, she announced that the operating lives of nuclear power plants would be extended by 12 years. But public opinion shifted sharply after the Fukushima nuclear disaster in 2011. Three months after the disaster, Merkel declared that all nuclear power plants would be shut down by 2022.

The timeline was delayed by the Russian-Ukrainian war that began in 2022, but Germany ultimately shut down its last three nuclear power plants on April 15, 2023, completing its nuclear phaseout. Nuclear power's share of total electricity generation, which stood at 31% in 1997, fell to 0% in 2024.

Energy prices surge... economy also falters

Germany's strong energy transition policy significantly increased the share of renewables. But as it became more difficult to ensure a stable electricity supply with only variable renewable energy, Germany began using natural gas power generation as a kind of bridge power source.

As a result, Germany remains highly dependent on fossil fuels. Although it has completed its nuclear phaseout, coal-fired power accounted for 20.5% of its electricity generation in 2025, while gas-fired power accounted for 17.0%. This not only slows Germany's greenhouse gas reductions but also makes its energy security more vulnerable.

Germany has long imported large amounts of natural gas from the Soviet Union, now Russia. Near the end of his term, in September 2005, Chancellor Gerhard Schroeder reached an agreement with Russian President Vladimir Putin's government to build an undersea natural gas pipeline. The plan was to build a pipeline, Nord Stream 1, that would transport natural gas directly to Germany under the Baltic Sea, bypassing Eastern European countries such as Poland and Ukraine. By avoiding transit countries, the project aimed to reduce the risk of gas supply disruptions and secure large volumes of natural gas cheaply and reliably.

The pipeline was completed and began operating in 2011. The government of Angela Merkel, who succeeded Schroeder, went on to approve the Nord Stream 2 project. But the energy crisis hit after gas supplies through Nord Stream 1 plunged in the wake of the Russian-Ukrainian war in 2022. According to Germany's Federal Network Agency, before the war, Germany depended on Russia for 52% of its natural gas. That share plunged to 22% in 2022.

In electricity markets, power plants are dispatched in order of fuel cost, from lowest to highest. Gas-fired power plants, which have the highest fuel costs, are dispatched last. When natural gas prices rise, wholesale electricity prices rise as well.

Natural gas prices surged after supplies from Russia were halted. In late August 2022, the wholesale price of natural gas on the European Energy Exchange (EEX) climbed to 315.9 euros per megawatt-hour (MWh), about four times the level before the war began. As fuel costs for gas-fired power rose, electricity prices followed. According to Germany's Federal Network Agency, the average wholesale electricity price in Germany jumped about 143%, from 96.85 euros/MWh in 2021 to 235.45 euros/MWh in 2022.

However, some argue that it is difficult to attribute Germany's energy crisis during the Russian-Ukrainian war to the expansion of renewables. Wind and solar power require almost no additional fuel when generating electricity. As a result, the more renewable electricity is generated, the more expensive fuel-fired power plants are pushed out of the electricity market. In this respect, renewables can also lower wholesale electricity prices.

Germany's continued reliance on fossil fuels can largely be attributed to its nuclear phaseout. In addition, the country plans to close its coal-fired power plants by 2038. With no nuclear power and coal-fired generation also set to decline, Germany is in a position where it must increase gas-fired generation to ensure stable baseload power. This is the context behind Chancellor Merz's remark: "We need baseload power generation, which is why Germany is building new power plants."

In fact, despite expanding renewables, Germany is also increasing the share of gas-fired power. On Nov. 3, Germany's Federal Network Agency selected 11 projects to build or convert gas-fired power plants, with a total capacity of 5.12 GW, through a tender. The tender was intended to secure reserve power capacity that could supply electricity when wind and solar generation is insufficient. Germany plans to convert its gas-fired power plants to hydrogen-fired plants over the long term.

The surge in energy prices dealt a direct blow to the German economy. Major companies shut down, cut jobs or moved production sites to neighboring countries. According to a 2023 survey by the Federation of German Industries, 59% of German companies cited "energy security and costs" as a reason for considering moving production abroad.

According to a January 2026 report by the Halle Institute for Economic Research (IWH), 17,604 companies went bankrupt in Germany in 2025, the highest number since 2005. That was 5% more than in 2009, when the country was hit by the financial crisis. As a result, 170,000 jobs were lost. Manufacturing suffered the most, with 62,000 jobs lost. The report cited energy prices, labor costs and administrative expenses stemming from bureaucracy as causes.

Germany's economic growth rate, measured by inflation-adjusted gross domestic product, was -0.9% in 2023 and -0.5% in 2024, marking two consecutive years of contraction. Growth returned to positive territory in 2025 at 0.2%, but output in manufacturing sectors such as automobiles and machinery, which are central to the German economy, fell by 1.3%.

Lessons from Germany: "Risks of phasing out nuclear and fossil fuels at the same time"

Germany's energy transition policy offers many lessons for South Korea.

In a report published this May, "Changes in the EU's Energy Transition Policy and Their Economic Impact Since the Russian-Ukrainian War," the Korea Institute for International Economic Policy said, "The EU's experience shows that the energy mix should not be overly dependent on any one energy source in order to ensure energy security." It added, "Germany's experience shows that even if the share of renewables rises rapidly, phasing out nuclear power while also reducing thermal power generation can bring issues of electricity supply stability and price competitiveness to the fore."

The report also stressed, "The South Korean government needs to reassess nuclear power not merely as one of several power sources, but in terms of energy security, electricity price stability and the foundation for supplying low-carbon electricity to industry." It added, "However, as the French example shows, nuclear power alone is not enough. In the long term, the expansion of renewables, securing flexible resources, investment in power grids and building confidence in safety regulations must go hand in hand."

This content was produced with the assistance of AI translation services.