Daniel Günther warns Friedrich Merz against cuts to renewable energy subsidies

Letter to the Chancellery

Schleswig-Holstein Minister-President Daniel Günther sent a three-page letter dated 2 October 2026 to Chancellor Friedrich Merz, urging the federal government to amend two draft energy laws. Günther stated that the draft Renewable Energy Sources Act (EEG) amendment and the grid connection package, prepared by Federal Economics Minister Katherina Reiche, threaten the economic potential of northern Germany. The northern state leader stressed that fossil fuel price pressures tied to the closure of the Strait of Hormuz show the necessity of accelerating renewable installations rather than slowing them down. Günther emphasized that expanded wind generation creates employment, regional value, and infrastructure while helping reduce electricity prices across the country.

I must express my greatest possible concern that the plans have the potential to harm the Federal Republic and my federal state.

Dispute over grid compensation

At the centre of the disagreement is the proposed redispatch reservation mechanism within the federal grid connection package. Under the draft approved by the cabinet, operators of new wind and solar installations in bottleneck areas where more than 5% of green electricity is curtailed would lose financial compensation during grid-related shutdowns. This curtailment rule would apply for six years and cover up to 20% of annual generation, whereas an earlier ministerial draft proposed a ten-year duration without a volume cap. Günther argued that stripping compensation shifts project risks directly onto financing banks and municipalities, increasing overall power system costs. Social Democratic Party energy spokesperson Nina Scheer also opposed the measure, stating that the SPD rejects the rule because it increases investment uncertainty and electricity prices.

The introduction of a redispatch reservation is wrong. It is a devastating signal for project developers, financing institutions, and our municipalities.

Rooftop solar and onshore wind

The state premier also contested proposed cuts to residential solar support and federal onshore wind auction quotas. Under Reiche's EEG amendment, feed-in tariffs for new private rooftop photovoltaic systems would end, requiring household operators to self-market their generated electricity under forthcoming transitional rules. Systems larger than 100 kilowatts have operated under direct marketing requirements since 2012, but Günther noted that ending guaranteed remuneration for small domestic rooftops damages citizen participation and public acceptance. Furthermore, Günther stated that onshore wind auction volumes are currently set too low to accommodate even already approved projects, leaving allocated land unused despite grid operators preparing infrastructure for higher capacities.

I seriously wonder whether, for the comparatively small segment of rooftop photovoltaics, the political benefit and harm are still in proportion.

Legislative timeline and coalition tensions

The legislative package was adopted by the federal cabinet in late July 2026 and completed its first reading in the Bundestag in late September. Economic committee hearings take place during the first full week of October 2026, with the government aiming for parliamentary passage by November at the latest. The reformed EEG must enter into force by 1 January 2027 because existing European Union state aid clearance expires at the end of 2026. While Reiche plans to pass the EEG and grid connection package simultaneously, Scheer pointed out that the grid legislation carries no mandatory legal deadline and could be separated during ongoing negotiations.