Overview
Germany is the largest energy consumer in the European Union followed by France and Italy. High energy prices have been a challenge for industry and private consumers in recent years. Production in energy-intensive industrial branches has been declining almost continuously since the beginning of 2022, with industrial output for energy-intensive goods in 2025 remaining roughly 17 percent lower than pre-2022 levels.
The energy transition, in Germany known as the “Energiewende,” is the country’s planned transition from an energy mix dominated by hydrocarbons and nuclear, to a low-carbon and nuclear-free economy based on the utilization of renewable sources.
Germany has a target for 80 percent of its electricity supply to come from renewables by 2030 and achieved 59 percent in 2024. Germany plans to reduce its greenhouse gas emissions by 65 percent from 1990 levels by 2030 as part of its goal to achieve carbon neutrality by 2045. Driven by increased domestic renewable energy production, imported electricity and a decline in energy-intensive industries, Germany’s carbon dioxide emissions fell to their lowest level in 2024 since the 1950s. Germany has the sixth most carbon-intensive electricity in Europe at 381 gCO₂/kWh compared to just 56 gCO₂/kWh in France in 2023.
Investments in offshore wind, photovoltaics, grid expansion, and energy storage projects will be necessary in addition to the implementation of a new, smart energy infrastructure that can balance the fluctuating supply of renewable sources. Furthermore, energy efficiency will play a key role in Germany’s energy transition by reducing the overall demand for energy and consequently enabling a quicker transition to renewable sources.
Despite progress with renewables, Germany has maintained a high degree of dependence on oil and natural gas to maintain energy supply, with Germany’s supply of non-coal fossil fuels being almost exclusively imported. These dependencies have generated two potential sources of instability. First, global price changes strongly affect German energy importers and end users. Second, market developments depend heavily on Germany’s relations with certain countries. The nuclear phase out in 2023 and planned coal phase-outs in 2038 are set to increase the country’s reliance on natural gas, making it increasingly important to continue efforts to diversify gas supply options, including liquefied natural gas imports.
Although the share of electricity produced from renewable sources fed into the grid has been constantly increasing, there have been no remarkable incidents of power interruptions thus far. Germany still has one of the lowest power interruption rates worldwide.
Energy consumption and generation
Energy consumption: In 2024, primary energy consumption in Germany amounted to 10,478 Petajoules, with more than 77 percent coming from fossil sources and with 20 percent from renewables. Energy consumption is still noticeably lower than before the outbreak of COVID-19 in 2020. Germany shut down its last remaining nuclear power plants in April 2023. The phase-out of nuclear energy and the continued promotion of renewable energies have caused changes in the 2024 energy mix. Oil remained the most important source of energy with a share of 36.1 percent, followed by natural gas with 25.9 percent. Hard Coal accounted for 7.3 percent and lignite for 7.6 percent. The phase-out of coal is legally mandated by 2038, with this deadline being supported in the new coalition agreement. Of the 20 percent renewable energy production, on- and off-shore wind accounted for 48.8 percent. The output of hydroelectric power stations increased by 11.6 percent year-over-year, driven by a high precipitation, making up 4.5 percent of all gross electricity generation. Power generation from wind energy accounted for 27.9 percent of electricity generation and for PV systems 14.9 percent, a year-over-year increase of 16.1 percent due to a significant installation of new solar plants.
Energy production: Germany is a large energy importer, with net imports making up roughly 70 percent of total energy supply in 2023. The most important domestic energy sources are biofuels and recovered waste energy with a share of 39.1 percent of domestic energy production, a decrease of 2.1 percent in comparison to 2022. Coal follows with 26.9 percent, a considerable year-over-year decline of 21.8 percent when compared to 2022. Renewables are the third largest domestic source of energy in Germany making up 22.5 percent of domestic energy production, with this source continuing to grow quickly. Renewables grew 8 percent from 2022 to 2023, and preliminary data from 2024 shows their share continuing to grow quickly, due to the installation of new photovoltaic capacity. The shares of other energy sources amount only to the low single digits.
Electricity generation: German electrical generation decreased by 4.2 percent year-over-year in 2024 and totaled to 431.7TWh. A major part of electricity produced and fed into the grid in Germany in 2024 came from renewable energy sources and accounted for 59 percent of total electricity production, an increase from 56 percent in 2023. Generation from hard coal fell 31.2 percent year-over-year and production from lignite dropped 8.8 percent. Gas-fired power plant’s share of electricity generation grew 8.9 percent to 56.9 TWh. Electricity from wind power amounted to about 137.6 TWh and with a share of 31.8 percent of total generation, wind was again the most important source of electricity. German photovoltaic systems generated about 63.3 TWh electricity, a 13.6 percent increase from 2023. Biomass generated 36.0 TWh and hydropower accounted for the vast majority of the remaining 17.2 TWh contributed by renewable sources. In total, renewable energy sources produced about 254.7 TWh in 2024.
Energy costs: Energy costs decreased in Germany in 2024, stabilizing from higher in prices in 2023 as Germany replaced Russian-supplied natural gas and stabilized its energy imports. Energy prices for German households (electricity, gas, gasoline) have decreased in 2024 but often remain above pre-2022 levels, before Russia’s invasion of Ukraine. German electricity prices for industrial businesses were around 0.19 USD/kWh in 2024 compared to just 0.08 USD/kWh in the United States in March 2024. The German government revealed plans to set aside around USD 11.3 billion by 2030 to subsidize electricity prices for energy-intensive industries to shield businesses from high electricity prices, especially energy-intensive companies.
Energy imports
Natural Gas: The total volume of natural gas imported into Germany in 2024 fell to 865 TWh. The largest volumes came from Norway (48 percent) and the Netherlands (25 percent). Overall, Germany’s natural gas imports were down 11 percent in 2024. Industrial gas consumption remains high at almost 514 TWh, which is 61 percent of total consumption. Although many industrial processes are to be converted to electricity or hydrogen in the long term, natural gas will continue to be relevant.
Crude Oil: Germany’s crude oil imports increased from 73 to 78.4 million tons in 2024, a 7 percent year-over-year increase.
Liquified Natural Gas (LNG): In 2024, Germany imported 69TWh of LNG, accounting for about 8 percent of total German gas imports in 2024. U.S. LNG now accounts for approximately 90 percent of German LNG imports, the highest share of any European country’s imports. After the Russian invasion of Ukraine and the ensuing energy crisis, Germany quickly diversified its gas supply and installed LNG terminals on its coasts to compensate for lost Russian gas supplies. As of May 2025, there are four active temporary LNG terminals supplying between 5-12 percent of gas consumed in Germany. U.S. LNG exporters have greater volumes of LNG available for spot market purchases than other major exporters, and additional U.S. export capacity will come online.
Energy policy
The Federal Ministry for Economic Affairs and Energy (BMWE) oversees the country’s energy policy and supervises the energy sector. The Federal Ministry for the Environment, Climate Action, Nature Conservation, and Nuclear Safety (BMUKN) is responsible for environmental protection, nature conservation and climate action.
Key to Germany’s energy policies and politics is the “Energiewende”, meaning “energy transition”. The most important tools for Germany to reach its targets on emission reduction are the expansion of renewable energies, the reduction of energy consumption, and the cessation of fossil fuels in all sectors of the economy. The policy also includes phasing out nuclear power, coal, and lignite. As of April 2023, Germany is no longer producing any electricity from nuclear power plants. The phase-out of coal and lignite is planned by 2038 the latest.
The two pillars of the “Energiewende” are renewable energy sources and energy efficiency. Key legal provisions are the Renewable Energy Source Act (EEG), which regulates the renewable electricity sector, and the Renewable Energies Heat Act (EEWärmeG), which promotes the increase of heat generated from renewable energy in new buildings. The share of wind or solar power and other renewables should reach 80 percent of electricity production by 2030. By then, Germany’s onshore wind energy capacity is planned to double to up to 110 GW, offshore wind energy should reach 30 GW - the capacity of 10 nuclear plants - and solar energy is planned to triple to 200 GW.
Germany relies heavily on imports of fossil fuels as its domestic resources are largely depleted, or their extraction is not desired or too costly. Rising European energy prices and the Russia-Ukraine war have led to a permanent shift in Germany’s energy and foreign policy. Germany, being Europe’s leading economy, is no longer importing any Russian gas directly, but its plans to phase out coal-fired power plants by 2038 and the shutdown of the last nuclear power plants in 2023 have left the country with few options. Accelerated capacity expansion for renewable energy and investments in LNG and hydrogen infrastructure will be the key elements to supply the high energy consuming economy.
The European Climate Law sets a legally binding target of net zero greenhouse gas emissions by 2050, but Germany wants to achieve climate neutrality five years earlier by 2045. EU Institutions and member states are bound to take the necessary measures at EU and national level to meet the target.
To support the energy transition, Germany adopted its first hydrogen strategy in 2020, which was updated in July 2023. Hydrogen is considered key to the country’s clean energy future with the two main goals being the decarbonization of energy intensive industries like steel, cement, and chemicals to reduce emissions, and to provide backup energy generation capacity for the growing share of renewables.
The updated hydrogen strategy also includes subsidies for the use, though not the production, of blue hydrogen. The focus will remain on green hydrogen produced from renewables. Hydrogen demand is expected to be driven primarily by the steel industry, basic materials, petrochemicals, mobility, logistics, and the power sector. However, several large energy intensive companies have significantly reduced their production in Germany. By 2045, the Ministry of Economy expects hydrogen demand to reach between 360 and 500 TWh, with an additional 200 TWh for hydrogen derivatives. To support the rapid development of the hydrogen market, “low-carbon” blue hydrogen is planned to be included to help meet this demand.
Germany has a well-developed natural gas pipeline grid and is connected to terminals in neighboring countries, especially in Belgium and the Netherlands. The Russian invasion triggered a lasting change in Germany’s energy policy. To replace Russian gas and strengthen energy security, the German government moved quickly and at significant cost to expand LNG import capacity. As of 2025, Germany operates four active temporary LNG terminals using Floating Storage and Regasification Units (FSRUs).
The German terminals have a capacity to cover around 17 percent of Germany’s gas needs. Land-based terminals with larger capacities than the floating LNG terminals are planned for 2028. With the additional planned LNG terminals, the Federal Ministry of Economy and Energy expects to cover about half of Russia’s gas imports in 2021. These terminals will be ‘hydrogen-ready’ facilities and capable of switching from LNG imports to (liquid) hydrogen and ammonia in the future. The previous government also started plans to build a core hydrogen network that would modify half of the existing 9700 km gas pipelines into a hydrogen network.
Opportunities
Germany is Europe’s largest electricity market with an annual power generation of about 430 TWh and a capacity of about 270 GW. More than one thousand market participants are active in the fully liberalized market, with new market actors – who do not own power plants or supplier networks - successfully entering the domestic electricity market. The “Federal Network Agency” (Bundesnetzagentur) is the regulatory office for electricity, gas, telecommunications, post, and railway markets. The agency is also responsible for ensuring non-discriminatory third-party access to the power network.
Germany’s shift away from Russian gas has created significant opportunities for LNG expansion, driven by the urgent need for energy security and diversification. The government’s rapid construction of floating LNG terminals—such as those in Wilhelmshaven, Brunsbüttel, and Mukran—has provided essential infrastructure to import gas from global markets. With all landing slots at key terminals already booked for 2025, demand for LNG remains robust, especially as gas storages require refilling and industry seeks stable supply. However, the market faces challenges, including lower-than-expected utilization at some terminals due to fluctuating demand and local opposition. Despite this, the continued need for backup power as Germany phases out coal and nuclear, and the commitment to build up to 20 GW of new gas-fired power plants by 2030, will sustain demand for LNG in the medium term. The government views LNG as a critical bridge fuel, ensuring flexibility and grid stability while renewables scale up. Efforts are underway to secure long-term LNG contracts and expand terminal capacity further, reducing reliance on volatile spot markets and supporting industrial competitiveness. Overall, while the economic and environmental costs are notable, LNG remains central to Germany’s strategy for energy security and a stable transition to a low-carbon future.
Energy infrastructure
Germany’s power grid ranks among the most reliable in the world, despite an increasing share of fluctuating renewable energy sources. The German energy transition is creating new challenges for the transport of electricity because of its changing power generation structure. Increasingly, electricity is being generated by wind and solar installations that are distributed throughout the country, some of them located far away from consumers. Furthermore, electricity generated by wind turbines and new conventional power stations in the north of Germany must be transported to the major power consumption regions in the west and south.
Hence, major investments in the expansion of the transmission and distribution networks are planned because of renewable energy integration and the growing consolidation of Europe’s energy markets. New technologies in the energy grid sector – for example superconductors, high-temperature lines and local power transformers – are being tested in pilot projects. Alongside battery storage with solar systems, large-scale storage solutions are playing a growing role in the balancing energy market. Hydrogen is expected to play an important role due to the linking of the energy, heat and mobility sectors.
Intelligent networks or “smart grids” allow fluctuating renewable energy power generation and consumption to be optimally managed by allowing a shift from “consumption-oriented generation” to “generation-optimized consumption.”
Information and Communication Technology (ICT) will play a central role in connecting the different parts of the energy systems. Intelligent ICT solutions will allow smart grids to efficiently manage power generation, consumption and storage in tandem with so-called “smart meters.”
Investment in High Voltage Lines and Grid Expansion
The total length of Germany’s transmission grid is about 37,000 kilometers. It transmits power with a maximum voltage of 220 kilovolts (kV) or 380 kV. Most of the power lines use alternating current, but the new transmission lines between northern and southern Germany, planned to be completed by 2027, will use more efficient high-voltage direct current (HVDC) technology. According to the Federal Network Agency, around 14,000 km of new power lines are needed to successfully implement the energy transition. As of early 2025, about 2,200 km of new transmission lines have been approved, of which 1,800 km have been constructed. 1,700 km of lines are expected to be approved in 2025.
In order to meet 80 percent of its electricity consumption from renewables by 2030, Germany faces an estimated USD 737 billion cost to expand its power grids by 2045. More solar and wind systems must be integrated into the network, and charging infrastructure for e-mobility, as well as heat pumps and electricity storage systems will need to be expanded.
Transmission system operators (TSOs) keep control power available to maintain stable and reliable supply. Demand for control energy is created when the sum of power generated varies from the actual load. There are four transmission grid operators in Germany: 50 Hertz Transmission, Amprion, TenneT TSO, and TransnetBW.
Energy Storage
The German energy storage market has experienced a massive boost in recent years. Germany is a global leader in energy storage technology for renewable energy systems. While the demand for energy storage is growing across Europe, Germany remains the European lead target market and the first choice for companies seeking to enter this fast-developing industry. The country stands out as a unique market, development platform and export hub. Total energy storage capacity installations jumped to 17.7 GWh in 2023, reflecting a 39 percent increase from the previous year. Particularly noteworthy was the growth in battery storage, which reached 12.1 GWh, a 40 percent increase, accounting for 30 percent of the total installed capacity. Energy storage systems are planned to play a fundamental role in integrating renewable energy into the energy infrastructure and help maintain grid security by compensating for the enormous increase of fluctuating renewable energies. Germany’s geography limits the development of new pumped storage capacity. Hence, new storage technologies and smart grids are needed.
The total number of photovoltaic systems in the country reached 4.8 million and Germany’s cumulative solar photovoltaic capacity reached approximately 100 gigawatts in 2024, a year-over-year increase of 15.5 gigawatts. Half of the newly installed solar power capacity in 2023 came from the residential segment, marking a 135 percent increase compared to 2022. In 2023, every second newly installed residential PV-system is combined with an energy storage system to increase the amount of own-consumed PV electricity. Retrofit storage installations are expected to be a major driver for improving energy self-sufficiency in private households and commercial operations. Only 8 percent of rooftop PV systems in Germany are equipped with a battery today – by 2030 it could be well over 80 percent.
To integrate the large amounts of wind and solar energy safely into the existing grid, large battery systems will play an import role in Germany’s future energy infrastructure to stabilize grid frequency. At present, several demonstration and commercial projects have been put in operation or are being planned. For example, there are plans to build the country’s largest battery park in Eastern Germany’s historic lignite mining belt. The 1.000 MWh project involves building a USD USD 220 million facility to store electricity that will gradually replace the sprawling coal pits of the Lusatia region.
Hydrogen
There are opportunities for exports of hydrogen and hydrogen technology solutions to Germany. The government advisory board, The National Hydrogen Council, expects that around 94 to 125 TWh of hydrogen will be needed by 2030. The German government estimates that 50 percent to 70 percent of the required supply will be imported. And there is an even wider range of forecasts for 2050 for Germany, between 400 TWh and 800 TWh. According to these estimates, Germany’s hydrogen imports will account for up-to two-thirds of its consumption. It will mainly be imported by land via pipelines, and by sea from other continents. Prior to importing hydrogen, Germany needs to build new pipelines and upgrade and convert its natural gas pipelines as well as building hydrogen underground storage facilities.
The government plans to import green hydrogen from other EU member states, particularly those states that generate hydrogen from offshore wind in the North and Baltic Sea, or PV in southern Europe. Furthermore, Germany is in contact with potential international suppliers of hydrogen, including Canada, the UAE, Australia, and the United States.
In January 2022, the European Commission granted state aid approval to the German government to allow the funding of the hydrogen import program H2Global. Initially, H2Global aimed to promote the development of green hydrogen production plants in sunny non-EU countries. The H2Global Foundation will purchase green hydrogen abroad via auctions under long-term contracts. In May 2023, Germany agreed to link its H2Global foundation to the European Hydrogen Bank, opening the funding model to all EU member states to support international hydrogen imports. Between 2027 and 2033, the Federal Ministry of Economics expects Germany to import at least 259,000 tons of green ammonia through the H2Global Foundation program.
Resources
Trade Events
- E-world energy and water – energy and water industry, Essen, February 10-12, 2026
- Hannover Messe – industrial, Hannover, April 20 - April 24, 2026
- The Smarter E Europe and Intersolar – energy transition, Munich, June 23-25, 2026
- Hydrogen Technology Expo – hydrogen technology, Hamburg, October 21-23, 2025
- Enlit Europe – power and energy, Bilbao, November 18-20, 2025