Despite several setbacks to electrification, Germany is expected to phase out coal much faster than originally planned.
Germany is likely to wean itself off polluting coal “much sooner” than originally planned, after hitting a major milestone in its clean energy transition.
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New data from London think-tank Energy Institute found that together wind and solar generated 44 per cent of the country’s electricity in 2025 – overtaking fossil fuels by one per cent.
Since the introduction of its landmark renewable energy law (Erneuerbare-Energien-Gesetz) in 2000, the country’s share of generation from wind and solar alone has skyrocketed by around 42 per cent.
At the same time, coal – which is often described as the ‘dirtiest’ form of energy – fell from supplying more than half of Germany’s electricity to just 21 per cent. Experts are now hopeful that the country will wean itself off coal before 2038.
It’s an impressive feat considering Germany phased out nuclear power – which contributed to 6.6 per cent of the country’s total power production in 2022. While nuclear generation is often categorised as clean energy, concern around its harmful waste and environmental impacts remains rife.
It mirrors a broader trend, as data from energy think-tank Ember found that wind and solar generated more power than fossil fuels across the EU for the first time last year (30 per cent compared to 29 per cent).
Germany’s renewable dilemma
Despite the victory, Germany is still grappling with negative electricity prices – which occur when supply outstrips demand.
This is often attributed to the inflexible nature of wind and solar power, which generate electricity based on weather conditions rather than actual demand.
It has led to a spike in curtailment, where operators temporarily switch off or reduce the output of solar and wind farms.
When curtailment occurs directly because generating electricity is no longer economically viable (rather than because of grid constraints), this is known as price-sensitive, or commercial, curtailment.
In the first half of 2026, Germany witnessed commercial curtailment increase by 20 per cent – from 1,216 to 1,463 GWh, even though negative electricity prices dropped by from 389 hours to 299.
A recent analysis from energy market intelligence firm Montel says that under Germany’s Solar Peak Act, which was introduced last year, newly built renewable assets lose their guaranteed subsidy top-up as soon as wholesale prices turn negative.
Experts warn that this has created a “much sharper commercial incentive” for renewable operators to switch off rather than keep generating at a loss.
Germany’s struggle to electrify
Electrification, which can help reduce curtailment rates by evening out demand, is on the rise in Germany despite several major setbacks.
Earlier this year, a draft law requiring households to replace fossil-fuelled boilers with climate-friendly alternatives was dropped by the cabinet – a move described by the green party as a “complete abandonment of Germany’s climate targets”.
It means that the requirement for all new heating systems in the country to be powered by at least 65 per cent renewable energy has been abolished, along with “forced heating system replacements or bans” for new oil and gas heating systems.
The move came just as data found that heat pumps have started to outsell gas boilers in the country, spurred on by volatile gas prices amid Iran’s stranglehold on the Strait of Hormuz.
Last year, heat pumps accounted for almost half (48 per cent) of all new heating systems sold in the country, with 299,000 units sold. According to the European Heat Pump Association (EHPA), German sales of heat pumps in the first quarter of 2026 are up by 34 per cent compared to the same period in 2025.
Germany is also falling far behind the rest of Europe when it comes to smart meter technology, with just two per cent of households having an advanced smart meter installed as of 2024 – despite making the devices mandatory for certain consumers last year.
Smart meters give households more control over their energy use and allow citizens to take advantage of flexible ‘time of use’ tariffs, which offer lower prices when demand is low or renewable energy generation is high.
By supporting flexible tariffs that encourage households to run energy-intensive appliances like washing machines when renewable generation is abundant, smart meters help to better align electricity demand with supply.
