Germany’s wind power shortfall drives up Europe’s energy prices

Germany, Europe’s largest wind power producer, is experiencing its most prolonged period of below-average wind power generation since early 2021, as reported by Reuters. 

This shortfall is attributed to low wind speeds since October 2024. Wind power, which is Germany’s primary electricity source, typically peaks in winter when wind speeds are highest.

The reduced output has forced Germany to rely more on fossil fuels and increase power imports, raising regional power prices across Europe. As of January 2025, spot wholesale power prices in Germany surged 47% year-on-year to €113 ($117) per megawatt-hour (MWh), contributing to higher prices across 21 European countries.

In 2024, Germany’s wind electricity output fell by 3% to around 131 terawatt-hours (TWh), with a 22% drop in the last quarter. The first 28 days of January 2025 saw a 16% decline in wind generation compared to the same period in 2024. To compensate, production from lignite, hard coal, and natural gas plants rose by 4.5%.

Despite potential improvements in wind power generation later in the winter, forecasts predict below-normal output levels through mid-February, possibly increasing reliance on fossil fuels and further tightening regional power markets.

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