How can Germany ensure a secure energy transition?
Germany has introduced various mechanisms to ensure security of supply in the context of the transformation of its power sector, which involves not only the nuclear and coal phase-outs but also the deployment of renewables and other clean energy technologies.
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System adequacy mechanisms and capacity reserves
Various measures in Germany and across Europe ensure a high level of energy security and reliability in the power sector during the transition.
System adequacy and supply security are addressed through various planning and monitoring processes. In Germany (and the EU), electricity systems are not centrally planned, making monitoring crucial for system adequacy and supply security. The Federal Network Agency (BNetzA) is legally required (EnWG, §51) to monitor and publish annual reports on Germany’s security of supply in the power sector.
At the European level, the European Resource Adequacy Assessment (ERAA), conducted by the European Network of Transmission System Operators for Electricity (ENTSO-E), evaluates system resilience up to ten years ahead.20 EU regulations on “risk preparedness” (2019) assign the Agency for the Cooperation of Energy Regulators (ACER) the role of monitoring the security of electricity supply measures across Europe. By establishing an integrated, European electricity market, security of supply can be assured at much lower cost than a national approach would deliver.
A short-term power market is designed to facilitate the integration of renewables, while putting more responsibility on renewable energy producers. The German electricity market has been designed to integrate large shares of variable renewables (see, RAP (2015)) through mechanisms such as a liquid short-term wholesale market, intra-day trading (15-minute intervals) with gate closure close to real time and the inclusion of renewable energy producers in balancing reponsibillity mechanisms.
Capacity reserves and other system adequacy mechanisms have been adopted to reinforce adequacy during the transition:
Grid reserve (around 8 GW): Introduced in 2013, this provides additional redispatch potential - adjusting electricity generation or consumption - to alleviate grid congestions during winter periods with high electricity demand.
Stand-by security reserve for some lignite power plants (up until 2023): Introduced in 2016, around 3 GW of lignite power plants were moved to “security stand-by” mode in case they were still needed for system adequacy purposes; these plants were reactivated during the 2022 energy crisis but were permanently shut down in 2024.
Capacity reserve: Introduced in 2019, contracted capacity of up to 2 GW is reviewed and determined every two years by the BNetzA.
“Special grid facilities”: Designated by transmission system operators and responsible for system adequacy. Contracted for ten years to restore power system security in the event of outages, these power plants are not allowed to participate in the electricity market.
Mechanism to avoid decommissioning of system-relevant plants: While electricity generation in Germany is not centrally planned, and because power plants are owned privately, system operators cannot directly prevent the decommissioning of plants critical to grid stability. To address this, power plants must notify the regulator of decommissioning plans. If a plant is deemed system-relevant by the system operator, the regulator can mandate the power producer to stay connected to the grid.
Capacity market: In planning and expected to be fully operational by 2028, with design details currently under discussion.
System operators ensuring grid stability
German grid operators employ various technical and planning measures to ensure grid stability despite growing shares of renewables (see: Agora (2018)). Contrary to predictions from the mid-2010s, balancing costs in Germany’s power system have fallen, even as wind and solar energy shares have risen nearly sixfold between 2008 and 2024. Improved weather forecasting, better coordination among Germany’s four transmission system operators and decentralised balancing have been key factors in cutting balancing reserve requirements in half.21,22
More generally, the liberalisation of the electricity market, which has greatly improved communication and coordination among grid operators, has enabled more efficient and reliable system operation.
Grid operators also plan to integrate “grid boosters” (large-scale battery storage systems deployed strategically) to stabilise the system and reduce costs;23 several such grid booster projects are underway across the country.24
Planning practices are also designed around redundancy principles. The “n minus one” (n-1) criterion – used for planning grid development – ensures grid stability even if a critical element, such as a specific generator, transmission line or transformer, fails. The n-1 contingency analysis helps to identify weak grid elements in advance for necessary upgrades or operational safeguards.
Impact of increased renewables on Germany’s supply security
Germany’s energy transition, marked by steadily increasing shares of variable renewables, has not compromised the quality of supply, despite the significant reduction of baseload power plant operation. In fact, the German System Average Interruption Duration Index (SAIDI) shows that the level of unplanned power capacity shortages has decreased over recent years, reaching its lowest in 2020 at 10.73 minutes (10 minutes and 44 seconds). This demonstrates that the shift to renewables has enabled Germany to gradually reduce its reliance on nuclear and coal without undermining security of supply.
With 25 GW of new PV installations added in 2023 and 2024—primarily driven by small rooftop PV systems—the need for digital communication with even small-scale generators has become increasingly crucial. In response, legislation has been enacted to enhance the digitalization ensuring that even the smallest PV generators are equipped with smart meters, enabling distribution system operators to regulate feed-in during periods of system or grid overload.
Russia’s invasion of Ukraine: impact on Germany’s long-term energy transition
Russia’s invasion of Ukraine has reinforced the case for accelerating Germany’s energy transition. The disruption of fossil gas supply and price increases has made energy security a central concern.
In the short term, reduced demand through energy efficiency measures has helped mitigate supply shortages. In the medium term, expanding renewable energy, increasing energy efficiency, and replacing fossil gas in industrial processes and in the buildings sector through direct electrification will help to lower energy prices, reduce reliance on imported fossil fuels, and achieve climate targets. Thus, the Energiewende is not just a short-term project, but a long-term societal, economic, and technological transformation.
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