Germany Announces Policy Dance on Nuclear Power Generation

Germany's New Coalition Government Maintains Nuclear Exit While Addressing EU Energy Concerns

Berlin, May 19, 2025

In a significant policy decision that continues to divide Europe, Chancellor Friedrich Merz's new coalition government has confirmed Germany's commitment to its nuclear phase-out while unveiling a multi-faceted strategy to address energy security and industrial competitiveness concerns raised by European partners.

Merz Coalition Holds Firm on Nuclear Exit

Despite earlier campaign rhetoric and pressure from industry groups, the coalition agreement between Merz's Christian Democratic Union/Christian Social Union (CDU/CSU) and the Social Democratic Party (SPD) makes no mention of reviving Germany's shuttered nuclear power plants. "Although desired by some members of the Merz coalition, there will be no comeback for nuclear power plants," according to recent reports from Berlin.

Instead, the new administration has outlined a dual approach: building 50 gas-fired power plants "as quickly as possible" to ensure energy security, while simultaneously increasing support for "nuclear fusion research with the goal of having the world's first fusion reactor in Germany."

This approach represents a compromise that acknowledges nuclear energy's potential while maintaining the phase-out of traditional fission reactors that concluded in April 2023.

Diplomatic Breakthrough with France

In a significant development addressing long-standing EU tensions, Germany has signaled to France it will "no longer object to treating nuclear power on a par with renewable energy in EU legislation," according to French officials. This diplomatic shift comes after years of German opposition to nuclear energy in EU taxonomy and funding discussions.

The rapprochement was formalized in a joint editorial by Chancellor Merz and French President Emmanuel Macron, where they committed to "realign their energy policies based on climate neutrality, competitiveness, and sovereignty."

This policy shift addresses concerns from EU nuclear-supporting nations like France, Belgium, and several Eastern European countries that had criticized Germany for blocking EU-wide nuclear energy initiatives while relying on electricity imports from nuclear-powered neighbors.

German Power Metrics

Data Shows Economic Impact of Nuclear Exit

The policy debate unfolds against a backdrop of mixed economic data. Critics of Germany's nuclear exit have pointed to energy prices as a major factor in the country's economic challenges, with "Three key energy factors" explaining Germany's economic slump: "disruptions to Russian natural gas imports... the closing of existing nuclear power plants, and the slow transition to renewable energies."

However, proponents of the transition point to more recent promising signs. According to the Fraunhofer Institute for Solar Energy Systems, "In the first year without nuclear power, around 270 TWh of renewable electricity was generated, 33 TWh more than in the same period last year." Meanwhile, electricity generation from fossil fuels has actually declined.

German wholesale electricity prices have also improved, with 2024 prices falling "below the level of 2021 (9.66 cents/kWh), when six nuclear power plants were still in operation in Germany." However, industrial representatives remain concerned about overall competitiveness, with the German Chamber of Commerce and Industry noting that "wholesale power prices in spring 2024 were still twice as high as they used to be in 2019."

European Commission Perspectives

The European Commission, under President Ursula von der Leyen, has increasingly recognized nuclear energy's role in decarbonization plans. At a nuclear summit earlier this year, von der Leyen stated that the "renewed interest" in nuclear came at a "pivotal moment" to reach the EU's climate goals, notably to "safeguard energy security and competitiveness."

The Commission has also launched initiatives like the European Industrial Alliance on Small Modular Reactors, aiming to maintain Europe's "global leadership in decarbonisation and energy transition." Germany's softening position on EU nuclear policies should facilitate more cohesive European energy strategies.

Industry Response and Future Outlook

For German industry, which has faced some of the highest energy prices in Europe, the new coalition's plans include targeted measures beyond the energy mix itself. The government has committed to a substantial infrastructure investment package, with promises that Chancellor Merz will earmark "one fifth of the package for climate action."

Energy experts point out that Germany faces challenging trade-offs between immediate energy security, climate goals, and economic competitiveness. The Merz government appears to be charting a middle path—maintaining the nuclear exit while investing in both conventional backup power and future nuclear technologies.

With the share of renewable energy in Germany's electricity consumption reaching "57% in the first half of 2024" and targets of 80% by 2030, the country's energy transition continues to move forward, albeit with ongoing debates about its pace and economic impacts.

As Europe navigates the complex interplay between energy security, industrial competitiveness, and climate goals, Germany's approach under Chancellor Merz will continue to influence broader EU energy policies in the years ahead.

Sources

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Germany Announces Policy Shift on Nuclear Power Generation