Economic stimulus: Katherina Reiche plans new gas-fired power plants for Germany

The new Federal Minister of Economics, Katherina Reiche, has presented plans to support the struggling German economy. The CDU politician specifically called for the rapid construction of new gas-fired power plants in Germany .

"We need flexible gas-fired power plants that can supply electricity when the wind isn't blowing and the sun isn't shining. And we need that quickly," Reiche said at the Ludwig Erhard Summit at Tegernsee. It is therefore important "that we quickly go into tender for at least 20 gigawatts of gas-fired power plants in order to maintain high levels of security of supply in our country."

The recent power outage on the Iberian Peninsula demonstrated the importance of such gas-fired power plants, said the former energy manager, who replaced Green Party politician Robert Habeck in the Ministry of Economic Affairs. To make this feasible, including in terms of costs, "long-term gas supply contracts" and a reality check of the energy transition are needed. This requires clarifying whether the expansion in recent years has been ideal, "or have we forgotten the system risks and system costs in the expansion of renewable energies?"

"The expansion of renewable energies has brought us closer to the goal of climate neutrality," Reiche said. However, it has also created system costs, such as grid expansion costs, costs for grid congestion, and costs for coal and gas power plants, which now need to be broken down. "That will be one of my first measures. We need some kind of monitoring and honesty about the status of the energy transition."

To give the German economy a new boost, the new federal government will also address electricity prices: "We need to lower the electricity tax, we need to reduce the gas storage surcharge, and we need an industrial electricity price, although I have to say that this is a tough nut to crack in Europe," Reiche said. The diversity of renewable energies must be utilized, "but we must always keep an eye on costs."

Reiche, however, ruled out a return to nuclear energy, as the CDU and CSU had loudly called for during the election campaign. "The phase-out is complete." Re-entering nuclear energy would not only require money, but also a lack of trust among the companies that would be responsible for it. In addition, it remains difficult to achieve a social consensus for nuclear energy in Germany. The opportunity for a return to nuclear power was missed during the energy crisis, and "we have to live with the situation now."

The export-oriented German economy also urgently needs new free trade agreements to protect global trade. "That means we need to enter into the relevant free trade agreements with Chile, Mercosur, India , Australia, and Mexico. And I explicitly say we also need the United States of America," Reiche said.

Other measures the CDU/CSU and SPD are using to get the economy back on track include lower corporate taxes, more flexible labor laws, and less bureaucracy. According to the last forecast of the former federal government, however, only stagnation of the German economy is expected for the entire year 2025.