WIND + SUN = POWER: Trends and Developments in the Electricity Sector

Subsequently, a selection of current developments in the political context will be discussed.¹

Renewable Energy Expansion Development

After a new record was reached in public net electricity generation by photovoltaic systems (PV systems) on May 14, another record was set on June 13: around 12:30 PM, PV systems in Germany fed approximately 49.35 GW into the public grid.² For comparison: in 2024, the maximum PV output fed into the grid was 44.3 GW (on June 25, 1 PM).³

Despite this increase in capacity, the expansion lags behind the politically desired expansion path. While net additions in February were still at 1,718 MW, only 817 MW were added in March and 945 MW in April. The value recovered in May with a PV addition of 1,113 MW⁴, which is almost at the previous year’s level. Despite the temporary decline, the expansion remains at the solid level of the previous year. The development shows that the expansion is fundamentally on track, even if the currently achieved volume is still around 60 percent of the monthly necessary additions to reach the target of 215 GW by 2030.

Wind power also presents a mixed picture. Although the sector experienced a record year in 2024 with over 2,400 newly approved plants and a total capacity of 14 GW, representing an 85 percent increase compared to 2023, the industry expects net additions of only 4.8 to 5.3 GW in the current year. The monthly figures so far underscore this development: 351 MW were added in March, 246 MW in April, and 384 MW in May. The total capacity of onshore wind energy in the current year is 65.04 GW.⁴ The reasons for this lie primarily in lengthy approval processes and insufficient grid infrastructure. The pressure to act is correspondingly high: if the target for wind power expansion of 115 GW by 2030 is to be achieved, profound structural reforms are necessary. The coalition agreement of the new federal government already agreed to revise planning, construction, environmental, and procurement laws and to accelerate approval processes for wind energy plants. On May 30, 2025, the coalition committee also agreed on an immediate program until the summer break. This includes, among other things, an establishment and implementation law for the 100-billion special fund “Infrastructure and Climate Neutrality.” The target is to significantly reduce the approval effort – not only for wind energy but also for hydrogen and geothermal projects.

Electricity generation across Germany also shows a contradictory development. In the first quarter of 2025, a total of 119.4 billion kWh of electricity was generated, a decrease of 1.9 percent compared to the same period last year. Particularly striking: the share of fossil fuels rose to 50.5 percent, exceeding that of renewable sources for the first time since 2023. While generation from conventional power plants increased by 19.3 percent to 60.2 billion kWh, electricity production from renewables fell by a significant 17 percent to 59.1 billion kWh.⁵ The decline in electricity generation from renewable energies in the first quarter of 2025 is largely due to less wind blowing in Germany during this period, resulting in significantly lower renewable electricity production, especially from wind energy.

Electricity Market Overview

In recent months, a significant decline in market values for renewable energies has been observed. In May 2025, the market value for solar power was still 1.997 ct/kWh, reaching its lowest level since May 2020. The market value for onshore wind energy also saw a decrease: the average market value fell from 7.314 ct/kWh in April to 6.171 ct/kWh in May.⁶

A main cause for this price drop is the cannibalization effect: when wind and sun simultaneously provide high yields, supply on the electricity market exceeds demand, especially during times of low load. This leads to extremely low prices or hours with negative electricity prices. In May 2025 alone, 112 such hours were registered, during which producers had to pay for their feed-in.

Long-term analyses show that this trend could continue. According to a study by Enervis on behalf of Node Energy, the market value for photovoltaics will fall by approximately 25 percent to about 3.7 ct/kWh by 2028.⁷ Similar developments are also emerging for wind power. The declining market values lead to an increase in EEG subsidy amounts, as the market premium, which is the difference between the market value and the tender award value, rises. This puts a greater strain on the EEG account, which in turn fuels debates about a reform of the support system.⁸ While the solar market value generally shows a downward trend, vertical solar systems are becoming increasingly attractive: in 2024, yields were achieved that were up to 28 percent above the market value.⁹

Overall, these developments clarify that it is not just about adding new plants, but about their intelligent integration into a market-oriented and stable electricity system. Flexible consumers, storage solutions, market-driven grid fees, and new contract models like Contracts for Difference (CfDs) could make the decisive difference in the future.

Federal Network Agency Tender Overview

The results of the first EEG tender round 2025 show a fundamentally positive market dynamic with high participation and competitive bids. However, industry associations warn against complacency: lengthy approval procedures and regulatory uncertainty could jeopardize expansion again.

In the first segment for ground-mounted solar systems (bid deadline March 1, 2025), 271 projects with a total capacity of approximately 2.64 GW were awarded, against a tendered volume of 2.62 GW. The award values ranged between 3.99 and 4.88 ct/kWh, with the average volume-weighted award value at 4.66 ct/kWh.¹⁰ In the second segment for rooftop solar systems from 1 MW (bid deadline February 1), 143 bids totaling 317 MW were awarded. The average volume-weighted award value here was approximately 9.10 ct/kWh.¹¹

In the onshore wind energy sector, participation was particularly high: for the tender on February 1, 2025, 506 bids totaling almost 4.9 GW were submitted, against a tendered volume of approximately 4.09 GW. Awards were granted to 422 projects. The average volume-weighted award value was 7.00 ct/kWh. Locations in North Rhine-Westphalia, Lower Saxony, Brandenburg, and Saxony-Anhalt were particularly successful.¹² Data for the last innovation tender round in May 2025 are not yet available, which is why they are not discussed further.

Despite the solid results, the German Association of Energy and Water Industries (BDEW) warns against a relapse into old problems: approval processes remain too lengthy in many places. Without decisive acceleration, even successfully awarded projects could wait years for implementation, posing a risk to achieving expansion targets.¹³

Additional uncertainty arises from the expiration of the current EEG on December 31, 2026. So far, the federal government has not commented on concrete plans for implementation. Alternative design options are listed by the BMWK and are presented in this article.

Tender Results for Solar Ground-Mounted,Rooftop Solar, Onshore Wind, and Innovation Technologies (Federal Network Agency)

Battery Storage Expansion Overview

The increasing volatility of the electricity market and the growing share of renewable energies make it clear that a long-term stable energy transition cannot be managed without sufficient storage capacities. In recent months, it has become evident how politics and business are increasingly taking the need for action seriously, and the expansion of battery storage in Germany is gaining momentum. Particularly in the first quarter of 2025, significant progress was made in both the commercial and private segments. According to the German Solar Association (BSW), over 1.7 GWh of new storage capacity was installed in this period alone, an increase of 1.5 GWh compared to the same quarter last year.¹⁴

Despite this positive development, the BSW urges an acceleration of the expansion pace. A current study by Fraunhofer ISE shows the enormous demand. The institute predicts a necessary capacity expansion of 100 to 150 GWh by 2030, including mobile storage solutions.¹⁵ However, it should be noted that storage solutions, especially battery storage, are often not primarily used for grid-serving functions. In many cases, market-based arbitrage strategies are paramount: electricity is deliberately stored during times of low prices and fed back into the grid during high-price phases to economically exploit price differences.

In April 2025, one of Germany’s most powerful stationary battery storage systems was commissioned in Bollingstedt (Schleswig-Holstein). With a capacity of 103.5 MW, the project is a prime example of how large-scale storage systems can function as system-stabilizing instruments with high feed-in of wind and solar power in the future. But Bollingstedt is only part of a comprehensive development: according to current evaluations of the publicly accessible data platform battery-charts.de, operated by the ISEA and PGS institutes of RWTH Aachen University, the total installed stationary storage capacity in Germany in June 2025 was approximately 20 gigawatt-hours. Of this, about 16.5 GWh accounted for home storage, about 0.8 GWh for commercial storage, and more than 2.7 GWh for large-scale storage projects.

In parallel, there is strong growth in the private home storage market. Compared to the previous year, the number of installed systems increased by about 50 percent to currently around 1.8 million devices with an estimated storage capacity of 19 GWh.¹⁶ June also brought relevant developments. The energy company RWE announced that it had already commissioned a 220 MW storage facility at the Hamm/Neurath site in February. An expansion of capacity by another 1.2 GWh is planned by 2028.¹⁷ These large-scale projects underscore that battery storage is no longer considered a niche application but represents a cornerstone of the future energy infrastructure.

A fundamental decision by the Federal Court of Justice (BGH) regarding the legal treatment of construction cost subsidies for battery storage was expected for May 27, 2025. However, the decision was postponed and is now expected on July 15, 2025. A comprehensive overview of the current legal framework, as well as funding mechanisms and relief for electricity storage projects, is provided in an article from the June 2025 edition of the ‘Kursbuch Stadtwerke’ newsletter by RÖDL. After the BGH has made a decision on customer installations, further details are expected with the still outstanding statement of reasons for the judgment.

Overview of Political Reforms and Strategies in the Context of Renewable Energies / Power Sector

The new government coalition of CDU/CSU and SPD commits in its coalition agreement to the already adopted German and European climate targets and to the Paris Climate Agreement. The focus in the area of climate and energy will be on a system- and grid-serving expansion of renewable energies. In addition, industry and private households are to be relieved by an electricity price reduction of at least 5 ct/kWh. An overview of the climate and energy sector can be found in this article.

In her first ten-minute speech, Federal Minister of Economics Katharina Reiche called for a “reality check” in the context of energy policy in the Bundestag. The needs for renewables as well as secured and controllable loads should be re-evaluated. While the expansion of renewables is important, it alone cannot provide affordable and reliable supply, Reiche stated. Affordability and security of supply should be brought back into focus and achieved with the addition of gas-fired power plants with a total capacity of 20 GW. Energy storage, grid expansion planning, and the use of Carbon Capture and Storage/Carbon Capture and Utilization should be considered technology-agnostic.¹⁸

The proposals from the current discussion paper “AgNes” (Incentives for a Fair Grid Fee System) by the Federal Network Agency could have an even broader impact.¹⁹ The models outlined therein aim to align current grid fees more closely with consumption behavior, load flexibility, and location factors. At its core, it involves introducing performance-based components into the grid fee structure, which are intended to specifically reward flexible consumers such as heat pumps, storage systems, or controllable charging stations. At the same time, time-variable tariffs are intended to create incentives through price reductions during phases of high renewable energy feed-in, to encourage electricity consumption during off-peak grid times. For many players in the energy industry, such a system would have fundamental effects on business models: grid-serving behavior would become economically attractive, not just technically. The paper is currently under consultation, and legal implementation could be pursued from 2026.

And What Else Happened?

On April 28, 2025, a massive power outage occurred on the Iberian Peninsula, paralyzing Spain and Portugal for hours. Approximately 15 gigawatts of power were lost within five seconds, which corresponds to about the output of eleven large nuclear power plants. The consequences were severe: large parts of Spain and Portugal experienced a power outage lasting several hours, which also temporarily affected regions in Southern France and Morocco. Mobile phone communication was significantly disrupted, and traffic lights and rail transport also failed.

According to investigations, the cause was not a cyberattack, but a chain reaction of technical and organizational errors: an overvoltage in a substation in southern Spain led to the failure of several conventional power plants, while reserve capacities were not activated. Additionally, there was a lack of sufficient reactive power, which further weakened voltage stability.

Since rotating masses – as found in conventional power plants – were largely absent, the power grid reacted significantly more susceptible to frequency fluctuations.

Economic damages are estimated at up to 4 billion Euros. The incident has triggered a Europe-wide debate about system stability – particularly about the role of storage, grid reserves, and controllable power plants in a climate-neutral energy system. A final report is expected no earlier than autumn.²⁰ ​

Conclusion

Despite ongoing uncertainties due to pending legal decisions, particularly in connection with the amendment of the EEG, BKZ, AgNes, and potential changes regarding customer installations, the market remains dynamic. The expansion of renewable energies continues to advance, and demand for battery storage also remains high. In the long term, creativity and new solutions are required – classic business models must be critically re-evaluated and, if necessary, realigned to prevent impending unprofitability.

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From the Newsletter “E|News: Renewable Energy”

Sources:

¹ The “WIND + SUN = ELECTRICITY” series is updated in each issue of E|nEws. This article refers to events in the period from February 11, 2025, to June 23, 2025.

² Electricity Production | Energy-Charts (Last accessed on 2025-06-20).

³ Fraunhofer ISE – Electricity Generation in Germany in 2024 (Last accessed on 2025-06-20).

⁴ Federal Network Agency – RE Statistics MaStR (As of June 2025) (Last accessed on 2025-06-20).

⁵ Federal Statistical Office – Electricity Generation in Q1 2025 Mostly from Fossil Sources (Last accessed on 2025-06-23).

⁶ Wind and PV Electricity Increasingly Less Valuable in the Future | energate messenger⁺ (Last accessed on 2025-06-23).

⁷ Enervis Short Study – Future Market Value Development (Last accessed on 2025-06-20).

⁸ Debate on EEG Account: BEE Calls for Reform of the WID Model – Wind Industry in Germany (Last accessed on 2025-06-20).

⁹ PV-Magazine (Last accessed on 2025-06-23).

¹⁰ Federal Network Agency – Solar Systems First Segment: Bid Deadline March 1, 2025 (Last accessed on 2025-06-23).

¹¹Federal Network Agency – Solar Systems Second Segment: Bid Deadline February 1, 2025 (Last accessed on 2025-06-23).

¹²Federal Network Agency – Onshore Wind: Bid Deadline February 1, 2025 (Last accessed on 2025-06-23).

¹³BDEW – Implement RED III Promptly – Avoid Disruption in Approval Acceleration (Last accessed on 2025-06-23).

¹⁴Over Two Million Battery Storage Systems Installed in Germany – Solarserver (Last accessed on 2025-06-20).

¹⁵Fraunhofer ISE – Paths to a Climate-Neutral Energy System (Last accessed on 2025-06-20).

¹⁶ BSW Solar Media Library.

¹⁷220 Megawatts to Stabilize the Grid: RWE Completes Battery Storage in Hamm and Neurath (Last accessed on 2025-06-20).

¹⁸Speech by the Federal Minister for Economic Affairs and Energy, Katherina Reiche. (Last accessed on 2025-06-23).

¹⁹Federal Network Agency – Discussion Paper: Framework Determination General Grid Fee System Electricity (AgNes) (Last accessed on 2025-06-20).

²⁰ZfK – Substation Failure: Cause of Blackout in Spain: Newspaper for Municipal Economy (Last accessed on 2025-06-23).We will show you which marketing models work in Germany!