Germany leads Europe again in onshore wind – but trouble is brewing

Germany’s onshore wind market is on the up after a years-long lull and seemed set to reclaim its place as the dynamic engine of the sector in Europe – but months into the new government of Chancellor Friedrich Merz, it appears trouble is brewing.

The new government under conservative Chancellor Friedrich Merz so far has only paid lip service to climate or renewables targets, and there are increasing signs that it could slow down the expansion of wind energy while giving fossil sources a new lease of life.

But an unease remains in the wind industry.

It was initially calmed down when the coalition contract between Merz’s conservatives from the CDU/CSU and the Social Democrats kept Germany’s target to become climate neutral by 2045, and said the government was “determined” to carry out the expansion of wind and solar as long as it was “grid-friendly”.

Reiche no longer mentioned that these plants should be ‘hydrogen-ready’ as earlier, more modest, plans for fossil back-up capacity did. The new plants could cement the continuation of the fossil age, critics fear.

Excessive renewables targets?

At a recent event of Germany’s Federation of German Industries (BDI), Reiche blamed the renewables expansion for a massive grid build-up, with higher grid levies on top of consumers’ power bills due to a “completely unrealistic, even completely excessive renewable energy target”.

“We can only adapt to the current grid expansion by aligning the expansion of renewable energies with the grid, and not the other way around,” Reiche has said.

“Responsibility must also be shared with those who benefit from the renewable system: We need to talk about construction cost subsidies. That we bring the business case down again."

Reiche not only irritated the wind industry and sector experts by questioning wind and solar power targets, but with mention of ‘construction costs subsidies’ also seemed to suggest the introduction of additional costs for wind farm developers in the future.

“Implementation of subsidies for construction costs, unpredictable curtailments, and grid fees for electricity producers are all likely to unsettle renewable energy projects.

“What we need is the most stable framework possible to enable market access, especially for smaller investors."

Falling behind Chinese competitors?

Volker Quaschning, a professor for renewable energy systems at the Berlin University of Applied Sciences HTW, thinks that despite the increasing wind power expansion thanks to the previous government, Germany even needs to double the pace of its build-out to reach its climate goals.

“Instead, the new government is discussing slowing expansion and building more gas-fired power plants. In doing so, it has already mentally written off the achievement of any climate protection goals.

“Therefore, no significant progress can be expected for the further expansion of wind power.”

Quaschning, one of Germany’s most active pro-renewables scholars, fears that if the wind expansion isn’t sped up, domestic wind power companies will “fall further behind their Chinese competitors”, who profit from very high expansion figures in China.

Nordex: Germany has experienced what energy dependence means

Not everyone is as worried, however.

“Of course, it is important to maintain the right framework conditions for the wind industry in Germany that can serve as an example for other European countries.

“The goals of energy independence, technological sovereignty and strengthening industrial value creation remain relevant, in particular against the backdrop of the current geopolitical and trade-driven uncertainties. Germany has experienced what energy dependence means, and we are hopeful that the federal government will take the right action to avoid this situation again in the future.”

Enercon CEO: Planning security must be maintained

Rival wind OEM Enercon is also stressing positive aspects and says it is happy that its domestic market, after years of slow growth, is finally taking off again, with more onshore projects reaching the realisation phase. But Enercon CEO Udo Bauer also acknowledges that this is still due to policies by the predecessor government.

“This planning security is of vital importance, especially for a resilient European manufacturing industry, which must be maintained.

“For us as manufacturers, it is now crucial to organise the industrial ramp-up of production and the associated operational areas in order to ensure the implementation and commissioning of projects for our customers.”

Bauer said he is optimistic about the future development of framework conditions for the industry in Germany after the change of government, but he added that the coalition agreement contains many things “that will challenge the wind industry, but are a step in the right direction: Power generation must be cheaper, capable of baseload, grid-friendly, smart, interconnected, and at the same time climate-friendly.”

Monitoring power needs

The government is currently carrying out a monitoring of the ‘state of the Energiewende (energy transition)’ in order to determine what the real electricity needs will be in the future to guarantee security of supply, affordability and climate protection.

Critics have said the new coalition is only pushing this to reach the conclusion that less power will be needed than assumed earlier, to then slash wind and solar targets.

“The announced energy transition monitoring program is so hampered by a number of assumptions that we believe are incorrect and a tight schedule of just four weeks, that there are already reasonable doubts as to whether it will even produce reliable and objective results,” the BWE’s Heidebroek said.

The BWE was also critical about legislation passed last week that is related to the EU’s latest renewable energy directive (RED III), which limits the principle of granting renewables projects the status of being in the ‘overriding public interest’ once certain percentages of wind power penetration have been reached in individual states. The ‘overriding public interest’ is one of the main factors of the recent upsurge in wind power, the group argued, particularly at a time of international energy crises.

The BWE isn’t happy either about the resurgence of a proposal to give the German military the right to veto turbines within a 50-kilometre radius of military radars, which could block a significant part of the country’s territory for wind power.

Nevertheless, the wind sector remains optimistic, she added.

“The continued high level of approvals lays the foundation for further strong expansion in the coming years,” according to Heidebroek.

“The coalition is now called upon to ensure that this trend continues."