Germany’s Wrong-Way Energy Policy

Global energy demand is soaring, driven by the technologies of the future. Germany, meanwhile, is blowing up power plants and regulating scarcity. On artificial intelligence, the country has already been left behind.

Industry relies on reliable electricity.

Industry runs on reliable electricity, which Germany is making scarcer and more expensive. Photo: Bill Pugliano/Getty Images

The German government has realized that the Energy Efficiency Act passed in 2023 is holding back the economy. The law’s only real efficiency was the speed with which it expanded Germany’s bureaucracy. Yet instead of abolishing the bureaucratic monster outright and making a genuine change of course in energy policy, the government is merely planning a new law with only slightly less red tape.

The ministry puts it this way: “With the Act to Accelerate the Implementation of the Energy Efficiency Directive, the Federal Ministry for Economic Affairs and Energy (BMWE) aims to provide significant relief for the economy. The existing Energy Efficiency Act (EnEfG) will be resolutely simplified, in line with the coalition agreement, thereby making a substantial contribution to cutting bureaucracy.”

Elsewhere in the World

Facebook founder Mark Zuckerberg recently announced plans to build an AI data center that will consume almost 44 TWh/year of energy at full capacity. Total commercial energy consumption in Germany stood at 936 TWh/year in 2024. A single data center in the US would therefore consume about 5% of the commercial energy used by the world’s third-largest economy.

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