Europe
Germany to overhaul green energy subsidies as Berlin phases out fixed solar tariffs
Germany is completely overhauling its world-renowned support program for wind and solar power as the federal government re-evaluates its two-decade-old energy transition policy.
Introduced under the Renewable Energy Sources Act (EEG) passed in the mid-2000s, feed-in tariffs guaranteed households and commercial operators 20-year contracts worth hundreds of euros per megawatt-hour of electricity generated, designed to kickstart the deployment of green energy capacity.
Although the generosity of these contracts has diminished since the late 2010s, a “lock-in effect” means the program still costs Berlin approximately €15 billion per year.
This financial burden is set to persist in the coming years, as solar panel owners are routinely paid prices significantly above market rates for their electricity, regardless of the time of day.
Following an agreement reached late Tuesday within the governing coalition, amendments to two key pieces of legislation—the EEG and separate statutory rules governing electricity grid access—are expected to fundamentally transform the sector.
Blow to rooftop solar installations
Speaking in Berlin on Wednesday, Energy Minister Katherina Reiche said: “We are embarking on a paradigm shift. We are putting an end to the EEG as an all-encompassing, seamless package.”
Fixed subsidies for rooftop solar panels will be phased out over the next 36 months and replaced by “contracts for difference,” the new European Union norm for renewable energy support.
Under this framework, minimum and maximum earnings will be capped. The new system will take effect for all new contracts beginning in January 2027.
To prevent overloads in the electricity system, smaller solar installations with a capacity of up to 100 kilowatts will be prohibited from feeding more than 50% of their output into the grid during peak hours. Failure to restrict generation would otherwise force grid operators to implement costly intervention measures.
Revisions to grid connection regulations will also penalize companies installing solar panels or wind turbines in areas where the grid is already congested.
“Costs previously borne by taxpayers will now have to be covered by grid operators,” Reiche stated.
Initially, a draft proposal put forward by the Christian Democratic energy minister would have exempted renewable energy operators from compensation if their wind turbines or solar panels were shut down for grid stability—for the first ten years following installation.
Following intense backlash from the renewable energy lobby, the rule will remain in effect but will apply to fewer regions, for a maximum duration of six years, and will not exceed 20% of annual production.
Green sector voices strong opposition
The renewable energy lobby swiftly criticized the reforms, arguing that they establish a subsidy framework hostile to the industry.
BEE, the umbrella organization representing wind, solar, and bioenergy companies, described the package as “disappointing for a progressive, resilient, and affordable energy system.”
Solar power association BSW, whose members stand to suffer the greatest financial impact, stated that the “proposed cuts jeopardize billions of euros in investment and put tens of thousands of jobs across the solar value chain at risk.”
Europe
Russia stays in ITER nuclear fusion project despite EU sanctions
Despite European Union sanctions and deteriorating relations with Brussels, Russia continues to take part in ITER, the world’s largest nuclear fusion experiment.
According to a report by Euronews television, this situation represents a rare example of cooperation in the ongoing crisis between Moscow and the West.
Following the war in Ukraine, the EU decided to reduce its dependence on Russian energy resources. Accordingly, Russian state institutions were excluded from various scientific programmes, and the provision of Russian funding to European scientific bodies was prohibited.
In contrast, ITER rules do not permit the expulsion of participating states from the project.
Owing to this legal structure, Moscow retains its 9.1% share in the venture. The Russian government continues to provide specialist personnel and technological support, while Russian engineers work alongside their European counterparts at the reactor site.
More than 30 countries, including Russia, are partners in the International Thermonuclear Experimental Reactor (ITER) initiative, where construction began in southern France in 2010. In this massive project, estimated to cost approximately 19 billion euros, critical technical assignments remain entrusted to Russian specialists.
Russian scientists and engineers are responsible for manufacturing complex components, including switchgear equipment, busbar systems, energy-absorbing resistors for power supply, and protection systems for the reactor’s superconducting magnetic assembly.
To manufacture these reactor components, a new industrial facility with an annual production capacity of 30 tonnes of superconductors was established at Rosatom’s site in the city of Glazov.
Moscow’s continued participation in the project is causing unease among some EU officials. In 2025, Members of the European Parliament approached the European Commission to enquire about ways to eliminate dependence on Russia within ITER.
EU Commissioner for Energy Dan Jørgensen replied that a participating state can leave the project only of its own volition.
The European Commission had previously announced plans to ban Russian nuclear fuel and technology, though the adoption of the measure was subsequently delayed.
Certain member states continue to import Russian fuel, with Hungary, for instance, building new nuclear power plants of Rosatom design.
World Nuclear Association data show that Rosatom alone accounts for approximately 44% of global uranium enrichment capacity.
According to a Financial Times report published in January, executives from energy companies Urenco and Orano called on the EU to draft a plan for the phased cessation of enriched uranium imports from Russia.
The companies argued that continuing these supplies creates long-term dependence on Moscow.
A report published in the summer by Sprott Asset Management indicates that, despite EU efforts to diversify sources, European dependence on Russian uranium is increasing.
According to Eurostat data, EU countries purchased 172.6 million euros worth of Russian nuclear fuel during the January to April period of 2026. Imports rose from 253.2 tonnes to 280.9 tonnes compared with the same period of the previous year, when purchases stood at 31.9 million euros.
Total EU imports of Russian nuclear fuel, including uranium, plutonium, and their compounds, reached 347.9 million euros across the whole of 2025. The Netherlands and France accounted for more than 90% of these purchases.
Commenting on the developments, Urenco Chief Executive Officer Boris Schucht noted that European producers are struggling to attract investment for enrichment capacity due to uncertainty over the future of imports from Russia.
Schucht stated that making new investment decisions remains difficult because Russia possesses significant idle capacity that could return to the market.
Europe
German Christian Democrats clash over proposed AfD party ban
Following the state election in Saxony-Anhalt, the Christian Democratic Union and Christian Social Union (CDU/CSU) are seeking a strategy against the victorious Alternative for Germany (AfD).
Hendrik Wuest, the Minister-President of North Rhine-Westphalia whose name is mentioned for the CDU leadership, proposes examining the possibility of banning the party.
The Hessian CDU and its Bavarian sister party, the CSU, reject the idea, arguing that the outcome would be uncertain and that the process would take too long.
Wuest’s push to establish a federal and state-level working group on the constitutional handling of the AfD is met with scepticism even among influential CDU colleagues.
“I still believe that the AfD must be politically marginalised,” said Hessian Minister-President Boris Rhein.
Rhein added that, in principle, everyone should have the freedom to discuss any subject, but warned against believing that a quick solution is possible.
In this context, the CDU politician referenced his experiences with the last ban proceedings against the NPD (National Democratic Party), which lasted several years and proved inconclusive.
Speaking on the sidelines of an event at the Representation of the State of Hesse in Brussels, he noted that this should always be kept in mind.
At the time, the judges of the Federal Constitutional Court ultimately concluded that the NPD was indeed pursuing unconstitutional aims.
However, according to their assessment, the party lacked the potential to successfully achieve those aims, and they therefore rejected the ban application.
CSU leader and Bavarian Minister-President Markus Soeder had previously expressed a view similar to Rhein’s.
“I completely understand that one might prefer the AfD not to exist, but the reality is that a ban under constitutional law is practically unenforceable,” Soeder said following a cabinet meeting in Munich.
In addition to years of legal proceedings, he stated that there is also a risk of the AfD gaining “martyr” status. Soeder argued that the AfD must be confronted on the substance of its policies.
Following the AfD’s election victory in Saxony-Anhalt, Wuest had earlier called for the party to be examined by a group consisting of federal and state experts, constitutional scholars, and officials from the Federal Office for the Protection of the Constitution.
“The real question is how the state, under constitutional law, should handle a party that pursues unconstitutional aims in at least some states,” the CDU politician explained.
According to him, the inquiry should be open-ended and not automatically lead to proceedings to ban the party.
Speaking in Brussels, Rhein said that following the elections in Saxony-Anhalt, the Union’s goal must be to “bring people out from behind the firewall and build bridges to the political centre.”
This means talking to people, taking their concerns seriously, and then translating these into very concrete policies.
One of the most critical statements regarding the AfD came from former CDU Chancellor Angela Merkel.
Saying that “as a CDU member, her heart bleeds,” Merkel noted that she views the Saxony-Anhalt election results as a turning point in the history of the Federal Republic of Germany.
Merkel also took a clear stance on how her party should deal with the AfD. She implied that she is not very fond of the “firewall” (Brandmauer) policy used by the CDU and Chancellor Friedrich Merz against the AfD.
“I did not invent it, nor do I particularly like it,” the former Chancellor said, noting that they cannot convince anyone with this slogan and that “democratic parties” must stop obsessing over the AfD and instead explain their own projects.
Merkel advised political parties to adopt a different communication style. Recommending that “democratic parties” seek greater contact with the public, the CDU politician argued that the absence of a shared information pool due to “personalised feeds” on social networks makes this more difficult.
Europe
German business urges swift reform after AfD win in Saxony-Anhalt
Germany’s small and medium-sized enterprise sector, known as the “Mittelstand”, has urged the federal government to implement “reform” following the Alternative for Germany’s (AfD) clear victory in Saxony-Anhalt.
Representing the group that forms the backbone of Europe’s largest economy, Christoph Ahlhaus, head of the German Federal Association of the Mittelstand, told Bloomberg that an urgent change in policy is needed to restore confidence in Germany’s economic future and to curb support for “populist” parties.
In an interview on Monday, Ahlhaus stated that the AfD’s victory in Saxony-Anhalt was “a clear signal for all people in Berlin and for Chancellor Merz,” adding, “The disappointment is very, very big.”
Germany’s traditional industrial sectors, ranging from automotive to chemicals and engineering manufacturers, are under intense pressure to adapt to a rapidly shifting competitive landscape.
High energy prices, bloated bureaucracy, and fierce price competition from Chinese rivals are eroding profits and triggering sweeping restructurings, fuelling anxieties over the economic future among industrial workers.
Ahlhaus noted that the vast majority of companies do not support the AfD’s policy aimed at reducing economic integration in Europe, arguing that crackdowns on immigrants could become a “major problem” for small and medium-sized enterprises.
Martin Lück, chief capital markets strategist at Franklin Templeton, said in a note: “The extremely strong performance of the AfD is, above all, an important political signal, but not yet an acute development for the capital market.” He continued:
“From an investor’s perspective, this creates problems if doubts arise regarding the state’s European integration, fiscal reliability, openness to international skilled labour, or the continuity of its energy and industrial policies.”
Lück added: “Saxony-Anhalt, which is particularly reliant on fresh investment and skilled labour, can hardly afford such doubts.”
Speaking to Bloomberg ahead of Sunday’s elections, the AfD’s lead candidate, Ulrich Siegmund, rejected the criticism and insisted that the party’s policies would actually help attract investment.
“Many companies want to invest in Saxony-Anhalt because they view it as a competitive edge, and having an administration that provides planning certainty once again is seen as an asset for the region,” Siegmund said.
According to Siegmund, the business community wants “to eliminate ideology entirely from economic development support and, in general, grant freedom back to companies.”
Saxony-Anhalt has the lowest per-capita GDP among Germany’s 16 federal states.
Since national reunification, Saxony-Anhalt has suffered a sharper demographic decline than any other region; between 1990 and 2024, its population fell by more than a quarter.
Marcel Fratzscher, president of the Berlin-based German Institute for Economic Research (DIW), contended that the election result was “an economic disaster as well,” saying: “Whoever forms the next government will struggle to implement reforms. Yet Germany needs very tough reforms.”
Speaking to Bloomberg, the former European Central Bank official warned that the “far-right” party’s platform could lead to catastrophe:
“If you look at the consequences of what the AfD wants, there will be a massive drop in GDP and a massive rise in unemployment. Germany is very export-dependent. Almost half of Germany’s GDP comes from exports, and the AfD will ruin [its] economic model; that will have terrible, as well as economic, repercussions.”
Major cutbacks across core sectors such as the chemical and automotive industries have heightened anxiety among workers regarding their economic future.
Far-reaching reorganisations, such as Volkswagen’s restructuring programme approved late on Thursday, will generate a domino effect across various regions of Germany, including Saxony-Anhalt.
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