Lower Wind Generation in Germany Raises European Power Prices

Germany has been experiencing lower-than-normal winds for four months, which have reduced wind power generation, boosting electricity prices and the reliance on fossil fuels.The German predicament, where wind speeds have been below average for extended periods of time since October 2024, is affecting regional prices as Germany’s utilities are also raising electricity imports from neighboring countries.At the end of last year, wind speeds in Germany slumped in the so-called ‘Dunkelflaute’ period in which there is a lull in wind speeds. This sent power prices in northwestern European countries surging and nations have had to rely more on fossil fuels such as natural gas to meet demand.The lower wind power generation, Germany’s largest source of electricity, has extended from the end of 2024 to the early weeks of 2025, too.Germany’s wind power output fell by 16% in the first 28 days of January from the same period a year earlier, per data from LSEG cited by Reuters columnist Gavin Maguire.As a result, Germany’s power producers have boosted fossil fuel generation, with coal and natural gas power plants raising their electricity output by 4.5% so far in January from a year earlier, according to LSEG data.At the end of last year, Germany’s power prices spiked as the so-called power margin, the available electricity supply to meet demand, sunk as low wind speeds and colder weather were straining the power system.Power prices across Europe also jumped, to the highest level in 20 months, additionally burdening key industries in major economies that had just started to recover from the 2022 energy crisis.Major economies in Western Europe – Germany, France, the Netherlands, Spain, and Italy, have seen a surge in energy costs. Economies in east and southeast Europe have been suffering even more as energy prices have been higher than in Western Europe in recent months.Greece is now urging the EU to move faster to address the high power and natural gas prices in the bloc that undermine its competitiveness and burden households.By Tsvetana Paraskova for Oilprice.com