Reiche Unveils Plan to Restructure the Energy Transition

July 30, 2026

Source: E & M powernews

The cabinet has approved the amendment to the Renewable Energy Sources Act (EEG). Economy Minister Katherina Reiche speaks of a paradigm shift—and already has the parliamentary process in mind.

The Federal Ministry for Economic Affairs sees the “next chapter of the energy transition” as having begun. A chapter that begins with two draft bills the industry has long awaited. When she took office last May, Katherina Reiche (CDU) emphasized the need to get system costs under control as part of the energy transition. Now, the Federal Minister of Economics has presented the drafts approved by the cabinet for the new Renewable Energy Sources Act (EEG) and the grid connection package (see separate report). These drafts mark a turning point.

“We are thus bringing about a paradigm shift,” Reiche said of the EEG amendment. “We are putting an end to subsidies for plants that generate such high returns that they would be installed anyway. We are ending the EEG as an all-inclusive package,” the minister explained to the press on July 29. Reiche also took the opportunity to call on all her CDU/CSU and SPD colleagues in Parliament to do their part. “During the parliamentary process, it will certainly be crucial not to lose sight of the costs and to align political objectives with the core of the amendment—namely, to structure the expansion of renewable energy in a cost- and system-efficient manner.”

Reiche highlighted several points of the amendment that she considers central. For example, regarding the expansion of wind power. “With the agreement reached on March 25 on the climate protection program, we agreed to expand wind capacity by an additional 12 gigawatts.” Wind power must be combined with effective regional management and must operate in a manner that supports the grid and the system.

Cap on Land Leases

A reference yield model for tenders is intended to ensure that wind power expansion progresses more smoothly in the southern part of the country. The government intends to direct new projects to areas “where there is capacity in the grid within priority wind zones and where existing grid bottlenecks are not further strained during periods of strong winds,” the minister explained.
In addition, Reiche continued, the permissible amount of land lease payments will be capped to further increase cost efficiency. “Subsidized wind farms subject to tenders that are now applying for land will, in the future, face a cap of 3.5 percent of the yield, which amounts to approximately 35,000 euros per wind farm site.”

Reiche explained that the new EEG opens up the possibility for offshore project developers to enter into offshore partnerships with countries in the European Free Trade Association.

Flexibility Bonus for Bioenergy

Regarding the new regulations on bioenergy, Reiche spoke of a “viable compromise.” The politician added: “It was important to us that bioenergy also has a future in the electricity system. That’s why we’re slightly increasing the tender volume for the 2027–2032 funding period to a total of 4,500 megawatts and, through a flexibility bonus, enabling small plants to operate in a controllable manner and thus also contribute to system responsibility.”

The amendment marks a major shift in policy for the PV industry. “In the field of photovoltaics, we will focus our subsidies in the future on more cost-effective options, specifically ground-mounted PV systems,” Reiche emphasized. The various subsidies for photovoltaic systems are to be standardized at 6.2 cents per kilowatt-hour.

The feed-in capacity of small and medium-sized rooftop systems will be capped at 50 percent, “to smooth out midday peaks in the feed-in profile and thereby reduce the need for grid expansion.” The CDU-SPD coalition wants to put an end to the feed-in tariff. “The era of fixed feed-in tariffs is coming to an end. With the exception of upgraded small hydropower plants under 25 kilowatts, it will no longer be the case that subsidies are provided permanently at the taxpayer’s expense,” Reiche explained. The goal is for systems to be equipped with control devices to feed power into the grid in a way that benefits the system.

Plant components made in Europe

To bring renewable energy more in line with market forces and competition, the “basic principle of direct marketing” is being introduced. The market premium system will be supplemented by a mechanism for repayment during periods of high prices—so-called Contracts for Difference.

A new provision for “resilience tenders” is to be added to the EEG. In tenders for the wind sector, it must be demonstrated that the plant components are manufactured in Europe. This is intended to safeguard “our industrial base,” said Reiche.

Author: Manfred Fischer