Energy Transition Progress Monitor 2026 by BDEW and EY: Photovoltaics and Electrification Drive Momentum – Energy Transition Needs to Accelerate

Berlin – Germany's energy transition is making progress, but not fast enough. The Energy Transition Progress Monitor 2026 by the German Association of Energy and Water Industries (BDEW) and EY highlights advances in renewable energy expansion and electrification while identifying significant gaps in grid infrastructure, heating, and hydrogen development.

The share of renewable energy in Germany's gross electricity consumption rose to 56% in 2025, driven primarily by the addition of more than 17 GW of photovoltaic capacity. At the same time, heat pumps outsold gas boilers for the first time. However, the emissions gap to the country's 2030 climate target has widened compared to the previous year.

Renewables Reach 56%: Photovoltaics Drive Growth, Wind Expansion Remains Too Slow

Despite a wind-poor first quarter, the share of renewable energy in gross electricity consumption increased to 56% in 2025, slightly exceeding the indicative target pathway under Germany's Renewable Energy Sources Act (EEG). The main driver was photovoltaics, which achieved a record capacity addition of 17.6 GW, according to the Progress Monitor.

While wind power expansion is gaining momentum, it remains below the levels required to meet future targets. Battery storage systems are playing an increasingly important role in providing flexibility and integrating renewable electricity into the energy system.

The climate protection outlook presents a mixed picture: by the end of 2025, emissions had been reduced by 48% compared with 1990 levels. However, the emissions gap to the 2030 climate target has grown larger than it was a year earlier.

Kerstin Andreae, Chief Executive of BDEW, stated: "The energy transition is both an economic competitiveness project and a security project. In the long term, it lowers costs and reduces dependence on imports. To achieve this, political reliability and a faster pace of implementation are essential."

Heat Pumps Overtake Gas Boilers – Hydrogen Ramp-Up and Heating Transition Still Lagging

The monitor reports significant progress in electrification. In 2025, more electric vehicles were sold than ever before, and heat pumps became the best-selling heating technology for the first time, with 299,000 units sold, surpassing gas boiler sales.

However, total sales of new heating systems fell to 627,000 units, the lowest level since 2010.

Hydrogen development continues to lag behind targets. Electrolysis capacity remains insufficient to achieve the goal of 10 GW by 2030. Although hydrogen production has increased slightly, it is still largely based on fossil sources. Renewable hydrogen remains costly and faces complex regulatory requirements. Meanwhile, biogas and biomethane are gaining importance as flexible energy carriers.

Metin Fidan, Partner at EY, commented: “The energy transition is not merely a transformation project but a strategic opportunity: it strengthens competitiveness, reduces dependencies, and lays the foundation for a resilient energy system.”

Grid Expansion Gains Momentum – Investment Conditions Remain Critical

The expansion of electricity grids is accelerating and is increasingly supported by digitalization. According to the Energy Transition Progress Monitor, a reliable long-term regulatory framework remains essential for mobilizing the billions of euros in investment required.

The first gas pipelines have already been converted for hydrogen transport, marking the beginning of the physical rollout of hydrogen infrastructure.

Charging infrastructure for electric vehicles is expanding faster than vehicle adoption. Installed charging capacity reached approximately 10 GW, significantly exceeding the EU target of 4 GW. For further scaling, the key bottlenecks remain the utilization of charging points, faster permitting procedures, and the availability of suitable sites.

Outlook

The BDEW and EY Energy Transition Progress Monitor makes it clear that target pathways must now be translated into concrete implementation measures. This requires faster deployment, digitalized grids, dispatchable capacity, energy storage, accelerated hydrogen development, and clear investment frameworks.

According to the monitor, the structural transformation of the energy system is already pointing the way toward a more efficient, cost-effective, and resilient energy future. However, the pace of implementation must increase significantly.

Source: IWR Online, 05 Jun 2026