Energiewende and the Russian Gas Shock

How Germany's energy transition phased out nuclear and expanded renewables, why reliance on Russian gas became a crisis in 2022, and the costs for industry.

Germany’s Energiewende (energy transition) aimed to shift to renewables.

Renewables growth

Germany became a leader in solar and wind, supported by feed-in tariffs from 2000.
Renewables supply over half of Germany’s electricity in recent years.

Nuclear phase-out

After Japan’s Fukushima disaster in 2011, Germany decided to close all nuclear plants. The last ones shut in April 2023.

Russian gas dependence

Germany relied heavily on cheap Russian gas, around 55 percent of its gas imports before 2022, via pipelines like Nord Stream.
Cheap gas supported chemical and industrial firms like BASF.

The 2022 shock

After Russia invaded Ukraine, gas supplies were cut, and prices soared.

Germany built LNG terminals rapidly.
Industry faced high energy costs; some energy-intensive production shrank.
The economy contracted slightly in 2023 and 2024.

Lessons

Energy security matters.
Diversifying suppliers reduces risk.

The chemical plant

BASF's huge Ludwigshafen site had relied on cheap Russian gas. After 2022, high gas prices led it to cut some production in Germany and expand elsewhere.

Thinking cheap energy imports are always safe

Dependence on one supplier created a crisis in 2022.

Key takeaways

Germany expanded renewables and phased out nuclear by 2023.
It relied on Russian gas for about 55 percent of gas imports.
The 2022 gas cut raised energy costs and hurt industry.
Diversification and energy security became priorities.