Avoiding a Kodak Moment

Germany’s energy landscape is at a crossroads, with a dangerous narrative threatening to derail years of progress. Critics who blame renewables for the country’s industrial and economic struggles, consciously or unconsciously overlook key facts and the foresight behind the decision to prioritize sustainable energy. A move away from renewables toward nuclear energy or fossil fuels would not only reverse this progress but also compromise Germany’s position as a global innovator. It is essential to separate myth from reality and reinforce the case for doubling down on renewables.

The Foresight of Germany’s Energiewende

Germany’s Energiewende, the strategic shift toward renewable energy and away from nuclear and fossil fuels, is one of the most forward-thinking energy policies of our time. This ambitious program, launched decades ago, was driven by a recognition of the urgent need to address climate change, reduce dependency on imported energy, and transition to a sustainable, decentralized energy system. While the implementation has been far from perfect and faced challenges, the foresight underlying this initiative is undeniable.

The decision to phase out nuclear power, though controversial, was rooted in public safety concerns and long-term environmental responsibility. Germany’s leadership understood that a transition to renewables would require significant investments and systemic change, but they also recognized the immense potential of this approach to secure energy independence and drive innovation. By investing in wind, solar, and other renewable technologies, Germany positioned itself as a pioneer in the global energy transition, setting benchmarks for others to follow.

Critics often overlook the economic and environmental gains achieved through Energiewende. Renewables have consistently lowered wholesale electricity prices, thanks to their low marginal costs (even though, due to unrelated reasons, it seems that the customer does not see these low costs). Additionally, they have reduced Germany’s reliance on volatile fossil fuel markets, shielding the economy from geopolitical shocks. The policy’s vision extended beyond energy production to include grid modernization and efficiency measures, creating a robust framework for a sustainable future.

However, the transition’s success hinges on Germany’s commitment to seeing it through. Doubts, delays, and calls to revert to outdated energy systems threaten to undermine decades of progress. The foresight of Energiewende lies in its long-term perspective; addressing the climate crisis while fostering economic growth and energy security. Abandoning this path would not only jeopardize these gains but also signal a retreat from global leadership in sustainability.

Lessons from Geopolitical Realities

The ongoing war in Ukraine has underscored the vulnerabilities of relying on imported fossil fuels. Russia’s weaponization of energy exports has demonstrated the dangers of dependency on external suppliers, exposing Europe’s energy security risks. Germany, as a major European power, must learn from this crisis and recognise that a return to fossil fuels or an overreliance on nuclear energy would only weaken its geopolitical position.

Renewable energy, by contrast, represents the only truly homegrown solution. With a well-developed smart grid and interconnects, Germany can leverage the infrastructure of neighbouring EU countries to balance variability in renewable supply. This collaborative approach would strengthen the European Union’s collective energy resilience and enable Germany to emerge as a renewable energy leader. By expanding its renewable energy capacity, Germany could not only achieve energy independence but also supply surplus clean energy to neighbouring countries (as it is already currently doing with France), further cementing its geopolitical influence.

Geopolitically, a commitment to renewables positions Germany as a key player in reducing Europe’s vulnerability to energy blackmail and fostering a more stable, self-sufficient continent. Returning to fossil fuels or diverting resources to nuclear energy, with its long lead times and high costs, would be a step backward that undermines these strategic advantages.

The Reality of Energy Costs

Germany’s high energy costs are often cited as a failure of its renewable energy policies. However, this claim is a gross oversimplification. The main contributors to high retail electricity prices are legacy infrastructure costs, grid modernization investments, and high taxation; not the inherent cost of renewables. Renewable energy sources like wind and solar have consistently lowered wholesale electricity prices through the "merit order effect." By prioritizing low-marginal-cost renewables, Germany has reduced dependency on expensive fossil fuels and stabilized its energy market despite global price volatility.

Blaming renewables for high retail prices is not only misleading but also distracts from necessary reforms in market design and taxation. Addressing these systemic issues, rather than rolling back renewables, is the real solution to achieving cost-effective and clean energy.

Industrial Adaptation vs. Legacy Dependence

Germany’s industrial challenges stem from an overreliance on legacy technologies, particularly in the automotive sector. Beyond automotive, industries such as steel manufacturing and chemical production have also lagged in integrating sustainable practices, further compounding the country’s struggle to maintain competitiveness. For decades, the automotive sector resisted the shift to electric vehicles (EVs) and clean energy integration, allowing competitors in the US and China to gain a substantial lead in these transformative technologies. While Germany delayed, these countries embraced renewables and EVs, positioning themselves as leaders in the global energy transition.

Germany’s early commitment to renewables was a visionary move that anticipated the inevitable shift toward sustainable energy systems. This foresight starkly contrasts with the current challenges and opposition Germany faces as economic anxieties, political narratives, and misinformation campaigns threaten to undermine the progress made. Recognizing and addressing these pressures is essential to ensure the long-term success of the transition. A prime example of intended foresight within Germany’s industrial sectors was the introduction of the BMW i3; a groundbreaking electric vehicle (EV) that symbolized the auto industry’s potential alignment with a sustainable future. Under Norbert Reithofer’s leadership, BMW showcased remarkable foresight and commitment to sustainability. The i3, with its carbon fibre structure, innovative use of recycled materials, and zero-emission powertrain, was a technical and environmental marvel. However, the lack of follow-up models and reluctance to aggressively compete with Tesla left BMW vulnerable. Reithofer’s bold vision was eventually overshadowed by a return to ICE-focused strategies, highlighting the systemic hubris and resistance within the industry to fully embrace electrification, and resulted in his removal from the role of CEO.

Tesla’s approach, centred on producing a mass-market EV with premium appeal at a competitive price point, posed a significant threat to legacy automakers. As Tesla prepared to launch the Model 3, BMW and much of the automotive industry, in their hubris, underestimated the company’s potential to disrupt the market and drive the broader EV revolution. BMW’s failure to anticipate the appeal of Tesla’s combination of cutting-edge technology, performance, and brand identity allowed Tesla to capture market share and set the pace for the EV transition. At the time, many saw Tesla as a niche luxury brand rather than a competitor capable of reshaping the market. To avoid losing momentum, BMW had the opportunity to reprice the i3 to undercut the Model 3 before it arrived on the market. This bold move, though it might have resulted in short-term financial losses, could have established BMW as the foremost EV manufacturer and positioned it to respond with a range of competitive EVs.

Instead, BMW’s hesitation (rooted in the industry’s hubris) allowed Tesla to dominate the EV narrative. The i3 remained a niche product, and the company failed to follow it with a broader lineup of EVs. Meanwhile, the Model 3 captured market share and consumer imagination, cementing Tesla’s position as a leader in electrification.

The BMW i3’s story underscores the dangers of complacency in the face of disruption. While the car itself was a remarkable achievement, its potential to transform BMW’s trajectory was never fully realized. This missed opportunity serves as a cautionary tale for the industry, reminding us that technological revolutions require not just innovation but also the courage to act decisively.

Similarly, Volkswagen’s Dieselgate scandal, while a monumental mistake, could have served as a turning point. The scandal offered Volkswagen an opportunity to reimagine its brand and industry leadership by fully embracing sustainable mobility. Being forced to establish Electrify America was a step in the right direction, creating one of the largest ultra-fast charging networks in the United States. However, the potential to align this initiative with a broader corporate strategy, leveraging it as a branding and market leadership tool, was missed. By failing to aggressively integrate Electrify America into its EV narrative, Volkswagen allowed competitors, like Tesla, to dominate the EV infrastructure conversation and missed the chance to position itself as a transformative leader in the global energy transition. As part of its settlement with the U.S. government, Volkswagen established Electrify America in 2017, committing $2 billion over ten years to promote zero-emission vehicles (ZEVs) and deploy a nationwide EV charging network. This initiative was designed to offset the environmental damage caused by the scandal and accelerate the adoption of electric vehicles.

Electrify America has since become one of the largest ultra-fast charging networks in the United States, with over 800 stations and thousands of chargers. The network features cutting-edge DC fast chargers capable of delivering up to 350 kW, enabling EVs to gain hundreds of miles of range in under 30 minutes. Additionally, Electrify America has invested in renewable energy to power its stations, further aligning with sustainable practices.

However, Volkswagen’s limited integration of Electrify America into its broader EV strategy and branding represents a missed opportunity. While competitors like Tesla dominate the EV infrastructure narrative, Volkswagen has not effectively leveraged Electrify America to bolster its market position, even with the launch of EV models like the ID.3/4. Despite this, Electrify America has played a critical role in reducing range anxiety for EV owners and driving the transition to electric mobility in the U.S.

Herbert Diess left behind a legacy as a pioneer who transformed Volkswagen into a formidable player in the global EV market, that it quickly squandered. His bold vision and willingness to challenge the status quo laid the foundation for the company’s future as a leader in sustainable mobility, even as the industry continues to navigate the challenges of the energy transition. Furthermore, Volkswagen’s CEO, who demonstrated a steadfast commitment to EVs and spearheaded transformative projects, was dismissed, reflecting the systemic reluctance within the industry to embrace long-term sustainable innovation. This setback underscores the broader industrial hesitance to fully commit to the renewable future, despite clear global trends.

These stories underscore a troubling trend: even when legacy automakers take bold steps toward sustainability, they often falter due to internal resistance, short-term thinking, or missed opportunities. This reluctance mirrors the challenges Germany faces in its national energy strategy, where similar forces of economic anxiety, misinformation, and vested interests threaten to derail progress. Recognizing and overcoming these barriers is crucial for Germany to fully harness the potential of its renewable energy transition and avoid repeating the mistakes of legacy industries. Germany, as a nation, must learn from these cautionary tales and recognise the urgency of decisively embracing renewables and sustainable innovation to secure its future.

The failure lies beyond adopting renewables but in the hesitation to fully commit to the broader changes they necessitate. Germany must learn from such missteps, double down on renewables, and accelerate industrial innovation to reclaim its leadership on the global stage.

The Pitfalls of a Nuclear Revival

Advocating a return to nuclear energy is often presented as a solution to Germany’s energy woes. However, the reality paints a different picture:

• High Costs: Reviving nuclear reactors or building new plants requires substantial investment. Estimates suggest that bringing a reactor back online could cost up to 1 billion euros, with some reactors potentially requiring investments up to 3 billion euros. Retrofitting existing reactors to meet modern safety standards and re-establishing supply chains would further inflate costs.

• Long Timelines: Reactivating nuclear infrastructure is not a short-term solution. Even under optimal conditions, it would take at least a decade to bring reactors online, delaying urgent energy needs.

• Waste Management: Germany’s lack of a long-term solution for nuclear waste storage presents an ongoing and expensive challenge that a nuclear revival would only exacerbate.

• Market Realities: The levelized cost of electricity (LCOE) for nuclear remains higher than that of renewables, making nuclear a less economically viable option.

Returning to nuclear energy would divert critical resources away from renewables, storage technologies, and grid modernization; areas that offer faster, cheaper, and more scalable solutions.

What Germany Could Achieve with Renewable Investments

Instead of allocating billions of euros and over a decade to revive nuclear energy, Germany could channel these resources into advancing its renewable energy transition. Here’s what the same investment and shorter time frame could achieve:

• Solar and Wind Expansion: With an estimated cost of €1 million per megawatt (MW) for solar and €1.5 million per MW for wind, Germany could install approximately 2,000 MW of solar capacity or 1,333 MW of wind capacity for the cost of reviving a single reactor. This would generate significantly more electricity over their operational lifetimes compared to nuclear.

• Grid Modernization: Significant investments could be directed toward smart grid technologies and energy storage solutions, ensuring the stability and efficiency of a high-renewable energy mix.

• Battery Storage Deployment: Advanced battery storage systems costing €500,000 per megawatt-hour (MWh) could be deployed to manage intermittency in renewable generation. For the same resources required to revive nuclear, Germany could establish extensive energy storage infrastructure.

• Job Creation and Economic Growth: Investments in renewables have a higher multiplier effect on job creation compared to nuclear energy, fostering local economies and innovation.

By redirecting funds toward renewables, Germany would not only accelerate its transition to a clean energy future but also enhance energy security, reduce dependency on imports, and position itself as a leader in global sustainability.

Renewables as Germany’s Competitive Edge

The transition to renewables represents one of the greatest economic opportunities of our time. Germany’s engineering expertise and capacity for innovation position it to become a global leader in renewable technologies. By embracing this path, Germany can:

• Drive economic growth through job creation in the renewable sector.

• Reduce dependency on volatile fossil fuel markets.

• Strengthen energy security with scalable, decentralized solutions.

• Become a renewables leader.

Examples from regions like South Australia, Spain, Portugal and Denmark show that high renewable penetration is achievable while maintaining grid stability. Germany itself has demonstrated moments of 100% renewable electricity generation, proving the technical feasibility of a sustainable energy future.

Industry-Wide Reluctance to Embrace Change

The challenges faced by bold leaders such as Carlos Tavares at Stellantis, Herbert Diess at Volkswagen, and Norbert Reithofer at BMW highlight a troubling trend in the automotive industry; a reluctance to accept and embrace the sweeping changes required by the transition to electric vehicles (EVs). While none of these CEOs was perfect, their respective departures underline the systemic resistance within legacy automakers to fully commit to electrification, even in the face of clear and imminent disruption.

Tavares’s unwavering push for electrification at Stellantis clashed with a board hesitant to abandon internal combustion engine (ICE) vehicles, leading to his departure in 2024. Similarly, Diess’s transformative leadership at Volkswagen, which included a €50 billion investment in EVs, faced significant internal opposition, culminating in his dismissal. Reithofer’s vision for the BMW i3, though groundbreaking, was met with scepticism and ultimately overshadowed by a return to ICE-focused strategies.

This pattern of resistance is emblematic of a broader Europe-wide reluctance to adapt to the EV and renewables revolution, reflecting the challenges of balancing short-term profitability with long-term innovation. The failure to decisively embrace change risks not only individual companies but the industry as a whole being left behind by nimbler competitors such as Tesla and China, which have consistently led the EV and renewables market through bold action and adaptability.

Germany, as a nation, must heed these cautionary tales. The same reluctance and complacency that have plagued legacy automakers threaten to undermine Germany’s energy transition if decisive action is not taken. The world is rapidly shifting toward renewables, and history is replete with examples of once-dominant entities (Nokia, Kodak, and even major banks in America), that faltered because they failed to adapt in time.

Germany’s future depends on learning from these missteps. Instead of hesitating or looking back toward outdated energy systems, it must drastically and confidently change course, fully committing to renewables and sustainable innovation. The cost of failure is too great; stagnation, economic decline, and the loss of its position as a global leader.

The Tensions Behind the Push for Regression

Despite the foresight and long-term benefits of Germany’s Energiewende, there remains a persistent push from certain quarters to revert to older energy systems such as fossil fuels and nuclear power. Understanding the motivations behind this shift reveals the complex interplay of economic anxieties, societal resistance to change, and short-term crises that threaten to derail Germany’s renewable energy transition.

Economic Concerns and Perceptions

Germany’s high retail electricity prices have fueled public discontent, with many blaming renewables despite evidence showing that legacy costs, grid modernization, and taxation are the culprits. These economic anxieties are amplified by energy-intensive industries, which worry about losing global competitiveness. Calls to return to supposedly cheaper and more reliable energy sources resonate strongly in this context, even though these solutions often carry hidden long-term costs, complexities and geopolitical problems...

Resistance to Change

The rapid pace of Germany’s energy and industrial transformation has created change fatigue among parts of the population. Many long for the perceived stability and simplicity of legacy energy systems. This resistance is further fueled by persistent myths about renewables (including claims of unreliability and inefficiency) which are often perpetuated by misinformation and gaslighting campaigns.

Vested Interests and Misinformation

Powerful lobbies tied to fossil fuels and nuclear energy have a clear financial stake in slowing or reversing the renewable energy transition. These groups frequently influence public narratives and policy debates, framing renewables as the root cause of Germany’s energy challenges. In reality, their efforts often obscure the systemic reforms needed to make Energiewende’s benefits more accessible to consumers.

Lessons for Germany’s Future

The reluctance to fully embrace renewables reflects broader societal and industrial challenges. Germany must learn from the failures of legacy industries that faltered by clinging to outdated technologies. Examples like Nokia and Kodak serve as stark reminders of what happens when entities resist necessary change. Similarly, the challenges faced by automakers like BMW and Volkswagen in adapting to electrification underscore the risks of underestimating disruption.

Rather than succumbing to short-term pressures or fool-hardy nostalgic appeals, Germany must stay the course. Reforming market design to ensure consumer benefits, investing in public education to dispel myths, and supporting regions and industries through the transition are critical to maintaining momentum. The stakes are too high to allow economic anxieties and vested interests to derail progress.

The Future Germany Must Choose

The rhetoric blaming renewables for Germany’s challenges is a distraction that exploits economic anxieties. The facts are clear; renewables are not the problem, they are the solution. Reverting to outdated energy systems would squander the progress Germany has made and risk economic and environmental stagnation.

Germany’s future prosperity depends on its ability to innovate, adapt, and fully commit to a sustainable energy system. The world is moving forward, and Germany must decide whether it wants to lead or fall behind. The decision to prioritize renewables was not a mistake but a foresightful step toward a cleaner, more resilient future. Abandoning this path would be a costly error Germany cannot afford to make.