100 Years of Energy Price Shocks: A Brief History of German Energy Policy - Germany's energy crisis deepens after Iran strike sends prices soaring
Germany is facing another energy price shock after a U.S.-Israeli strike on Iran sent costs soaring. The crisis has reignited debates over the country's long-term energy strategy, as policymakers scramble to prevent consumer backlash and industrial slowdowns. Experts warn that without structural changes, the cycle of short-term fixes will continueāleaving the nation exposed to future disruptions.
This latest shock follows a familiar pattern. Past crises, like the 1973 oil price spike, forced Germany to rethink its energy reliance. Back then, oil made up 55% of the energy mix; today, that share has dropped sharply. The 1973 crisis also pushed energy efficiency to the forefront, though direct policies for renewables came later.
Over the decades, Germany introduced key reforms. The 2000 Renewable Energy Sources Act (EEG) set feed-in tariffs to boost wind and solar. Later, laws like the *GebƤudemodernisierungsgesetz* subsidised heat pumps and building upgrades. After Russia's 2022 invasion of Ukraine, the focus shifted againāthis time to rapid expansion of solar, wind, batteries, and heat pumps to cut reliance on imported gas. Yet short-term fixes often mask deeper problems. Germany's energy weaknesses stem largely from foreign dependencies, tying energy policy to security and diplomacy. Diversifying suppliers spreads risk, but it doesn't eliminate itādependencies simply shift elsewhere. Analysts argue that treating energy as a reactive issue, rather than a strategic priority, leaves the country vulnerable to repeated shocks. History shows crises can drive progress. The 1973 oil shock laid the groundwork for today's renewables push. But relying on price-driven policies alone has proven costly, as seen with past overdependence on cheap oil and gas.
The current crisis demands more than emergency measures. Without a long-term strategy, Germany will remain at risk of future disruptions. For an industrialised nation with few domestic resources, the next energy crisis is not a question of if, but whenāand how prepared the country will be.
