What are Germany’s nuclear, coal and fossil gas phase-out strategies?
Over the last few decades, Germany’s energy supply has shifted from predominantly fossil fuels and nuclear power to a more diversified system based on renewables. Germany switched off its last nuclear reactor in 2023. It also targets a phase-out of coal by 2038 and aims to replace fossil gas with cleaner alternatives by 2045.
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Nuclear phase-out
The German nuclear programme, initiated in the 1960s, faced decades of resistance, which intensified after the Chernobyl nuclear disaster in 1986 and the Fukushima Daiichi accident in 2011. As early as 2000, Germany adopted its first nuclear phase-out policy (Atomausstieg), aiming to shut down all nuclear reactors by the early 2020s. This policy, based on an agreement with utilities, set a maximum operational lifespan for nuclear power plants and capped their total energy output. However, the phase-out plan was briefly rescinded in 2009. The 2011 Fukushima disaster prompted its reinstatement under conservative Chancellor Angela Merkel (CDU), with a final shutdown planned for 2022. Although the phase-out of the last remaining three reactors (4.3 GW) was pushed back by several months due to energy security concerns in Europe after Russia’s invasion of Ukraine, Germany officially ended the use of nuclear power in April 2023. The search for a final repository for radioactive waste is still ongoing, with completion planned by 2050.
Some critics argued that extending nuclear operations could have bolstered Germany’s energy security and reduced the carbon intensity of its power sector. However, this shutdown created the necessary space and policy support required to fast-track the development of wind and solar power, driving down their costs. Moreover, despite the completion of the Atomausstieg, Germany’s consumption of hard coal, lignite and fossil gas all declined in 2024 compared to 2022, along with emissions – suggesting that the impact of the nuclear phase-out on overall emissions should not be overstated.43
While the suitability and policy support for nuclear energy vary across countries depending on power system characteristics, techno-economic factors and governance structures, most analysts in Germany agree that nuclear power would not meet the system’s current needs: increasing flexibility of both power supply and demand.44 In addition, key utility stakeholders have indicated they remain opposed to re-activating the country’s nuclear power plants, primarily on economic grounds.45
Coal phase-out: targets and progress
Germany’s 2020 legislation set 2038 as the deadline for phasing out coal power. While the incumbent government at the time (the “traffic light coalition”)* had initially aimed for a 2030 deadline for the power sector, no agreement was reached on this new timeline at the federal level. At the regional level, the state of North Rhine-Westphalia plans to phase out coal by 2030. However, a steadily rising carbon price will likely push coal out of the power mix in the years ahead, even in the absence of a hard political deadline.
The Coal Commission
Coal has played a prominent role in the German economy for over 120 years, shaping regions and industries. In many areas, it remains deeply anchored in cultural and political traditions. However, the combustion of hard coal and lignite for generating electricity has historically also been the largest source of greenhouse gas emissions in the country. Phasing out coal in Germany is thus a multidimensional endeavour that intersects not only with energy and climate issues but also labour and regional policy. Recognising the socioeconomic impact of a coal phase-out, Germany has adopted a “just transition” strategy to address the needs of affected coal workers, companies and regions.
In 2018, the government established the “Commission for Growth, Structural Change and Employment”, known informally as the “Coal Commission”, which devised a roadmap for gradually reducing and terminating coal-fired power generation in Germany and submitted concrete proposals for maintaining growth and employment in the affected regions. It published its final report in January 2019. (For more information on the Coal Commission, see Agora (2019))
The Coal Commission emerged from the German political culture of consensus-building. It was set up to define a clear end-date and intermediate steps for the coal phase-out while also taking into account economic development, structural change, social justice and climate action. It was made up of ministerial representatives, officials from the impacted federal states and experts from non-governmental organisations, labour unions, academia, industry associations and the political parties.
Several conclusions can be drawn from the work of the Commission. Regions will inevitably undergo structural change, so the transition should be actively managed, with early involvement of all relevant stakeholders. These regions themselves should decide detailed coal exit pathways and strategies, as only they can fully understand local barriers and opportunities. A clear timetable with manageable steps is essential for a comprehensive phase-out strategy.
It must be acknowledged that changing framework conditions and the implementation of phase-out plans in reality have created political tensions that reflect hard economic truths: the profitability of coal mining and coal power plants has rapidly declined, which likely played a role in bringing the phase-out date forward from 2038 to 2030. While some jobs in the coal industry will be lost, other jobs are now being created in other sectors, with several new projects for solar,46 storage47 and clean energy hubs48 already underway on former coal mine sites.
Complex, multi-stakeholder processes like the coal phase-out never affect industry alone. They also highlight, for example, urban-rural differences. There is thus growing recognition in Germany that the government must not only foster job creation in affected regions but also invest in infrastructure, educational opportunities, economic development, culture and the arts to increase their appeal, particularly in those regions that are already structurally disadvantaged.
*Government parties of Social Democrats, Greens, Liberals from November 2021 to February 2025.
Coal phase-out: measures
In July 2020, the German government introduced the “Act to Reduce and End Coal-fired Power Generation”, or the “Coal Phase-Out Act”, mandating a gradual reduction in coal power capacity with a complete phase-out by 2038.* The plan specifies pathways for lignite and hard coal, targeting a reduction in 2030 coal capacities to 8 GW for hard coal and 9 GW for lignite. Lignite capacity reductions were negotiated bilaterally between operators and the government, while hard coal plant reductions were managed through auctions, where plants bid competitively for the lowest level of compensation enabling them to decommission. These auctions ended in 2023, resulting in a total phase-out of 10 GW of hard coal capacity (and small lignite plants under 150 MW) at a cost of around EUR 700 million, with decommissioning required by 2026.49, 50 From 2027, hard coal plants must be phased out without financial compensation.
The “Structural Development Act” promotes structural change in coal mining regions by supporting new sustainable economic activities. This omnibus law introduced the “Investment Act for Mining Areas” and amended various other regulations. The act allocates EUR 42.8 billion in financial aid to coal regions up until 2038. Of this, EUR 14 billion will be managed directly by the affected states, to be invested in business-related infrastructure, public transport, high-speed internet and transport infrastructure. An additional EUR 26 billion will be managed by the federal government in collaboration with the affected states. Furthermore, up to EUR 2.8 billion will be allocated to economically weaker local jurisdictions dependent on hard coal plants.51
These measures ensure a structured transition away from coal, supporting both environmental goals and regional economic development.
* The German government, the state government of North Rhine-Westphalia and RWE have decided to phase out coal by 2030.
Plans for replacing fossil gas
Germany aims to reache climate neutrality by 2045. The country’s infrastructure planning envisages replacing gas in the power sector with renewables, storage, demand-side flexibility and synthetic gases, including green hydrogen, at the latest by 2045.
All scenarios underlying the grid development plan (Netzentwicklungsplan), see a role for fossil gas in power generation until it is gradually replaced by green hydrogen or other climate-neutral fuels by 2045.
Fossil gas made up 16% of Germany’s total electricity generation in 2024. Any new gas plants must be hydrogen-ready, and many existing plants are scheduled to be retrofitted to be able to use green hydrogen. The phase-out of fossil gas in the electricity sector is indirectly supported via the German Power Plant Strategy.52 Under climate neutrality scenarios, fossil gas consumption in the power sector falls to almost zero by 2040, while electricity consumption doubles to more than 400 TWh compared to 2025.53
Outside the power sector, today, fossil gas is used heavily in industry and the residential sector for heating and cooking.54 Germany plans to gradually phase out residential gas use, replacing it with electricity, particularly through electric heat pumps, hot water heaters and cooking appliances. For heavy industry, current government and business strategies involve transitioning to either direct electrification or “green gases” such as ammonia, methanol and green hydrogen.
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