Transition state of play – Germany is emerging from the energy crisis
(Clean Energy Wire, 24 Feb 2023) Germany appears to be emerging from the energy crisis relatively unscathed. Russia’s attack on Ukraine dealt a heavy blow to Europe’s biggest economy, because it was particularly dependent on Russian fossil fuels.
But wholesale energy prices have retreated from their peaks, allaying fears of gas shortages, irreparable damages to the country’s prized industries, economic hardships for its citizens, and social unrest. The long-term impact on the country’s landmark energy transition remains uncertain, as Germany redoubles efforts to roll out renewables, but also bets on liquefied natural gas (LNG), a temporary revival of coal plants and a limited runtime extension for its remaining nuclear plants to weather the storm. This article provides an overview of the state of play of Germany’s shift to climate neutrality, which is now dominated by its response to the crisis. It will be updated regularly.
What’s the energy crisis’ impact on the economy and households?
The energy crisis has slowed economic growth in Germany, as rising energy prices put a damper on industrial production and inflation means citizens will buy less. But Europe's largest economy held up surprisingly well at the end of 2022, leading the government to expect it will dodge a widely expected recession. The government forecasts that inflation will slow to 6.0 percent in 2023 from 7.9 percent last year.
Clean Energy Wire, 24 Feb 2023: Transition state of play – Germany is emerging from the energy crisis