The Alternative for Germany (AfD), a far-right party, achieved historic gains in two state elections in September and is seeking to form Germany’s first far-right-led state government since World War II. This has raised concerns over the outlook for the renewables sector in Germany. We believe the AfD’s anti-Net Zero stance poses a risk to renewables at the regional level, but that Germany’s national energy and decarbonisation targets remain on track.
At the regional level, the AfD’s gains pose a risk to investors in the energy transition due to state-level control over permitting, regional land-use planning, and the designation of priority areas for wind power. The AfD’s manifesto for Saxony-Anhalt, where it is seeking to form a government, calls for a “wind power moratorium,” aiming to bring a complete halt to new wind turbines in the state. Its most effective lever would be to block new wind priority area designations and bolster citizens’ initiatives against planned projects. This poses risks for renewables investors in the state, including permitting delays, missed build-out timelines, and a freezing effect on new project commitments. Even if the federal framework—which carries greater legal weight—remains firmly in place, these risks would persist.
We believe mature projects that undertake stakeholder engagement with local communities are at less risk of regional planning delays. Separately, early-stage onshore wind projects that can promptly secure and demonstrate proof of documentation, including environmental permits, land rights, and end-of-life provisions, are well-positioned to avoid the AfD’s intended cut-off for planning-stage projects.
Despite the regional-level risk, we believe Germany’s national energy policy and decarbonisation agenda remain on track. This reflects the following factors:
1. The AfD has not secured any state-level majority
On 6th September, the party won 43.8% of votes in Saxony-Anhalt, securing 39 of 83 seats, three seats short of an absolute majority. The Sahra Wagenknecht Alliance (BSW) party, which has said it is open to working with (but not forming a coalition with) the AfD, narrowly cleared the 5% of votes threshold required to secure seats in parliament. The vote share will give BSW five seats in the state parliament. As such, a coalition with the AfD (though unlikely) would only give the parties a weak majority.
On 20th September, the AfD won 38% of votes in Mecklenburg-Vorpommern. However, a combination of left-wing parties is expected to form a coalition, shutting out the AfD.
2. Energy policy is a federal matter
Germany’s energy transition and decarbonisation framework—the Energiewende—is governed at the federal level. It includes a coal phase-out timeline and renewables expansion targets. State governments do not set energy, defence, or foreign affairs policy. This legislative and policymaking division ensures that even if the AfD leads a state government, the country’s wider policy architecture would not be impacted.
While the Bundesrat (Germany’s upper house, where state governments are represented) provides a potential avenue for influence, Saxony-Anhalt holds just four of the chamber’s 69 votes. Even in a scenario where the AfD governs all five eastern German states, it would command only 19 votes and would be well short of any blocking position. The Bundesrat is also not involved in all legislation, further limiting the practical impact.
At the federal level, the AfD is polling at approximately 28%, which would translate to roughly 204 of 630 Bundestag (Germany’s federal parliament) seats and fall significantly short of a governing majority. Because Germany’s mainstream political parties, other than BSW, subscribe to a political firewall—according to which they will not govern with the AfD—the AfD cannot form a government based on its current polling. Current polling suggests a coalition between the Christian Democratic Union/Christian Social Union (CDU/CSU), the Social Democratic Party (SPD), and the Greens remains viable following the 2029 federal election (as BSW remains below the 5% threshold, at 3.5% nationally). These parties maintain consensus on the direction of climate policy and a pro-European orientation, strengthening the stability of Germany’s energy policy outlook.
3. Regional economic dependence on decarbonisation
Saxony-Anhalt is one of Germany’s leading renewable energy states and 63% of its electricity was produced by renewables in 2023. The sector employs approximately 26,000 people across the state’s supply chains, and Enercon, Germany’s largest onshore wind turbine manufacturer, employs around 1,000 people in the state. The renewables industry is a material part of the eastern German economic base, and we believe an aggressive anti-renewables policy stance would risk damaging the prosperity of the AfD’s own electorate. Even among AfD voters, a majority supports Germany remaining committed to climate action, suggesting that support for the party is rooted in its immigration, education, and cultural policies, rather than its anti-decarbonisation stance.
Read more from Capstone’s EU Energy team:
The UK’s Public Control Push Creates Uncertainty for Utilities
The EU Chemical Industry’s Looming Carbon Cost Pain and Reform Uncertainty
The EU’s Hardening China Stance Spells Risks and Opportunities
