WIND + SUN = POWER: Trends and developments in the electricity sector

The article series ‘WIND + SUN = POWER’ provides an overview of the latest news in the context of the electricity sector with a focus on photovoltaics (PV) and onshore wind in Germany (as of 10 February 2025). The following section presents the developments in the electricity market in 2024, analyses how the market will develop in the future and looks at the political reforms and events
that have taken place ​in the recent past.​^​1​​

Developments on the electricity market

Electricity generation from renewable energies continued to rise in 2024. This is shown by the analysis of the Fraunhofer ISE Energy Charts. The share of renewable energies (RE) in total net electricity generation in 2024 was 58.7 per cent or 275 TWh (2023: 54.7 per cent or 267 TWh) (see also Figure 1). Net public electricity generation (not including industrial and commercial self-generation and PV self-consumption) even reached a RE share of 62.7 per ​cent or 259 TWh (2023: 59.6 per cent or 254 TWh). Electricity imports rose to 25 TWh (2023: 9 TWh), which was mainly due to the low electricity prices in neighbouring countries in the summer (further information on the electricity exchange balance in Germany can be found in the following article​). The total load including self-consumption totalled 500 TWh in 2024 (2023: 494 TWh).²

[Figure 1: Development of total net renewable electricity generation and the share of renewable energies in total net electricity generation in Germany]

The highest share of net electricity generation was attributable to wind power at 33 per cent or 136 TWh (2023: 32.7 per cent or 139 TWh). A new record of 72 TWh or 15.2 per cent of total net electricity generation was produced by photovoltaic systems (2023: 12.6 per cent or 61 TWh), of which 12 TWh was consumed directly.³

Figure 2 below shows the development of RE expansion in Germany.

[Figure 2: Development of net installed capacity for renewable electricity generation in Germany]

The expansion of onshore wind energy installations was sluggish in 2024. At the end of the year, the total net installed capacity was 63.5 GW and therefore below the planned EEG target of 69 GW.⁴ However, according to the German Wind and Solar Agency, the number of approvals for onshore wind turbines increased significantly in 2024. In total, a capacity of around 14 GW was newly approved (an increase of 85 per cent compared to 2023).⁵ The tendering results of the Federal Network Agency also reflect the expectation of higher wind expansion in the coming years. While the tendering rounds in 2023 were characterised by significant undersubscription in some cases, the total volume not awarded in the tendering rounds in 2024 decreased and the last two tendering rounds were even oversubscribed. In total, 11 GW were awarded in 2024 out of a tendered volume of 12 GW (2023: 6.4 GW were awarded out of a tendered volume of 9.8 GW). As a result, a certain degree of competition for funding under the EEG has now emerged in the onshore wind segment in the last two tendering rounds, which is already slightly reflected in the development of the average, volume-weighted award value. While this was always close to the maximum permissible value in previous tenders (between 7.31 ct/kWh - 7.34 ct/kWh with a maximum value of 7.35 ct/kWh), this fell to 7.15 ct/kWh in the most recent tender.⁶ At the end of 2024, the Federal Network Agency announced that the maximum value for the tendering rounds in 2025 for onshore wind turbines would remain at 7.35 ct/kWh, as ‘[...] the encouraging upward trend in bid volumes has not yet led to a significant reduction in the award values [...] and the forecast LCOE have remained stable compared to the previous year’. Without the new determination by the Federal Network Agency, a lower maximum value provided for in the EEG would have applied again.⁷

​
Compared to the expansion of onshore wind, the installation of PV systems in 2024 once again set a new expansion record with a net output of around 16 GW. The total net capacity at the end of 2024 was therefore 99.2 GW. Consequently, the target of 88 GW set in the EEG was exceeded in this context.⁸ Strong PV expansion can also be expected in the coming years. As in previous years, the Federal Network Agency's tendering rounds in the 1st and 2nd segments continued to be oversubscribed, which was also reflected in the level of the average, volume-weighted award value. In 2024, this was between 4.76 and 5.11 ct/kWh in the 1st segment with a maximum value of 7.37 ct/kWh and between 8.92 ct/kWh and 9.04 ct/kWh in the 2nd segment with a maximum value of 10.5 ct/kWh.⁹ In the context of the PV tenders, the maximum values for 2025 were reduced by the Federal Network Agency to 6.80 ct/kWh (ground-mounted PV), 10.40 ct/kWh (roof-mounted PV) and 9.00 ct/kWh (system combinations as part of the innovation tender; 2024: 9.18 ct/kWh), partly due to lower forecast LCOE and the tender results of the last three rounds.¹⁰

The increase in PV production in 2024 was also reflected in particular in the development of the market value of solar energy. The following figure shows the development of the average spot market price as well as the market value of solar and the market value of onshore wind.

[Figure 3: Development of the average spot market price, market value of solar and market value of onshore wind in Germany]

​
The annual market value or the average spot market price in 2024 was 7.946 ct/kWh and has therefore fallen by around 16 per cent compared to 2023 (2023: 9.518 ct/kWh). This trend is also reflected in the development of market values. Compared to the previous year, the annual market value of solar has fallen by around 35 per cent to 4.624 ct/kWh and the annual market value of onshore wind has fallen by around 17 per cent to 6.293 ct/kWh.¹¹ However, while the profile value for onshore wind generation has remained largely constant compared to the previous year at around 80 per cent, the profile value for PV generation has fallen significantly from 76 per cent to 58 per cent.¹² In this context, the cannibalisation effect, which is attributable to the simultaneous feed-in of PV systems, has therefore intensified noticeably in 2024. According to the Federal Network Agency, the number of hours with negative prices has also increased. In 2024, there were a total of 457 hours with negative electricity prices (2023: 301).¹³ The occurrence of negative prices can also be attributed to the oversupply of PV electricity (especially at midday in summer). They occur when the supply of electricity exceeds the demand for electricity at a particular time.

In order to counteract situations of ‘temporary generation surpluses’, among other things, the German Bundestag adopted a draft law to amend the Energy Industry Act (also known as the ‘Solar Peak Act’) on 31 January 2025. Among other things, the amendments stipulate that operators will generally no longer receive subsidies in times of negative spot market prices. In return, the subsidy period is to be extended accordingly. In addition, it is planned that the feed-in power for smaller systems that do not have a smart metering system will be limited to 60 per cent of the installed capacity. Further regulations concern the more flexible utilisation of storage systems.¹⁴ Detailed information can be found in the following article.

Developments over the past year in the context of the increase in hours with negative prices and the associated reduction in the market value of solar power highlight the need for action on the path towards a climate-neutral electricity system. A correct step in this context is certainly to set the legal framework in such a way that system operators are fully confronted with the price signals on the market and adjust their behaviour or feed-in accordingly. Another important point in the context of integrating renewable energies into the electricity system and counteracting temporary oversupply of electricity is the increase in flexibility, such as battery storage. The expansion of battery
storage in Germany was also very dynamic last year. According to Energy Charts, the output of all installed battery storage systems at the end of the year was 12.2 GW and the capacity was 18.8 GWh (2023: 8.2 GW and 12.1 GWh respectively). Overall, home storage systems still dominate. However, it is expected that there will be a significant increase in large-scale storage systems in the coming years.¹⁵

And what else has happened?

On 28 November 2024 (C-293/23), the European Court of Justice (ECJ) ruled that the regulation on customer installations contained in the EnWG is contrary to European law. It is currently still unclear whether and how the privileges associated with the customer installation (grid fees, levies and charges) will continue to apply in future. It is not yet clear how national legislators will deal with the ECJ's ruling. You can find more information on the ECJ judgement in the following article or contact us if you have any specific questions.

Conclusion

To summarise, the current RE expansion figures show a largely dynamic expansion that is likely to continue in 2025. This is also necessary in order to adhere to the EEG expansion path and ultimately cover 80 per cent of gross electricity consumption with renewable energies by 2030.¹⁶ Currently, the RE share of gross electricity consumption is around 54 per cent.¹⁷ On the one hand, this illustrates the strong expansion of renewable generators in the past - but on the other hand, it also highlights the need for further action in order to achieve the desired target. Until then, various adjustments need to be made to our electricity system in order to ensure the further integration of renewable energies while maintaining security of supply. In this context, the BMWK published an options paper on the ‘Electricity market design of the future’ last summer, in which various fields of action and measures in this context are discussed (further information can be found in the following article). One aspect, for example, is the change to the current EEG subsidy system of the sliding market premium. From 2027, the subsidy system must be designed with a repayment mechanism for revenues that are higher than the subsidy requirement. However, it is not yet clear exactly what this will look like.¹⁸ The plans of the new government must also be taken into account in this context. Among other things, the coalition agreement provides for relief for consumers and companies in the context of energy prices and the removal of barriers to the flexibilisation of the electricity system.¹⁹ Further information on the efforts of the CDU/CSU and SPD in the energy sector can be found in the following article​. An update on the development of the electricity sector will follow in the next issue of E|nEws.​​

_____________________________________________________