Energy Newsletter

Germany covers more than half of electricity consumption through renewable energy (53% in Q1 2026) for the first time, with wind and solar as main drivers. Gross electricity generation from renewables increased by over 15% compared to Q1 2025. This demonstrates measurable progress in the energy transition, but simultaneously reveals critical supply gaps during wind lulls and seasonal fluctuations.

Spot gas prices in Germany have risen to over €60/MWh – approximately 6x higher than in the USA – driven by the Iran war and supply bottlenecks. RWE CEO warns of potential price increases; German gas supply is threatened. This drives electricity prices up via the merit-order mechanism and endangers industrial competitiveness.

The Ultranet project is scheduled for completion by end of 2026, with A-Nord following in 2027. Despite grid expansion, massive congestion costs continue due to insufficient transport capacity between north and south. The TSOs demand increased cost-sharing by green power generators for grid expansion – a conflict-prone model.

Expert debates reveal criticism of the merit-order price mechanism: gas prices artificially set high electricity prices despite wind and solar having marginal costs. Experts discuss decoupling models and alternative electricity market designs as solutions. Missing political solutions amplify industry's competitive disadvantage against USA/China.

The European Court of Justice rejected 9 objections from municipal energy suppliers against the EU approval of the EVH/enercity acquisition by E.ON/RWE. This consolidates market power among large energy corporations while municipal utilities lose their spheres of influence. For the energy transition, this means increased centralization instead of local energy communities.