Quieter Winds Shift Power Paradigm: Fossil Fuels Outpace Renewables for First Time in Two Years
Unprecedented Resurgence: Conventional Power surpasses two-year low levels
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In an unexpected turn of events, Germany saw an upsurge in conventional energy sources leading the electricity generation mix for the first time in two years. The Federal Statistical Office reported a whopping 29.2 percent drop in wind power generation, primarily attributed to less wind—leading to a 17.0 percent decrease in renewable energy generation between January and March 2025 compared to the previous year. On the flip side, coal, natural gas, and other fossil fuels recorded a remarkable 19.3 percent increase.
A total of 119.4 billion kilowatt-hours of electricity were produced and fed into the grid in the first quarter, marking a 1.9 percent decline from the beginning of 2024. Amidst the overall decrease in renewable energy, wind remained the most significant energy source, capturing a 27.8 percent share. Coal and natural gas accounted for 27.0 percent and 20.6 percent, respectively, while photovoltaic (solar) power increased by over one-third, representing a 9.2 percent share of the total electricity mix. Biogas contributed 6.1 percent, and hydropower contributed 3.8 percent.
Electricity imports rose by 14.9 percent, reaching 19.3 billion kilowatt-hours, as exports slid by 3 percent to 16.2 billion kilowatt-hours during the same period.
Factors Behind the Energy Shift
The primary factor behind the conventional energy resurgence in Germany can be traced to unfavorable weather conditions—sustained low wind speeds—resulting in a significant decline in wind energy generation.
Additionally, conventional power plants played a crucial role in ensuring grid stability and meeting base load demand during periods of low renewable generation—particularly from wind and solar. This increased reliance on conventional power sources is because the volatility of weather-dependent renewables necessitates flexible and dispatchable conventional power resources to fill supply gaps.
Market and policy dynamics have contributed to the persistent dependence on fossil fuels. While the installation pipeline for wind and solar projects continued to grow, the shortfall in existing generation outweighed the anticipated capacity additions. The dropping price cap for PV tenders in Germany facilitated lower solar PPA prices, boosting solar adoption, yet this growth has not fully offset the unexpected drops in wind output.
Lastly, market price volatility has added to the complexity of managing the energy mix. The surge in intraday electricity prices, averaging €125/MWh, has been driven by the variable renewable supply and a lack of investment in flexibility assets like batteries and smart grids. "Dunkelflaute" events, characterized by low wind and solar output, exacerbated the price volatility and the reliance on conventional power.
Summary
| Factor | Impact on Renewables | Impact on Conventional Sources ||-------------------|-----------------------------------|-------------------------------|| Low wind speeds | Wind generation down 31% | Increased demand for backup power || Volatility of supply | Fluctuating supply | More dispatchable capacity needed || Market price volatility | Higher electricity prices | Higher profits for flexibility || Policy (tender price caps) | Encourages solar growth | Slows the impact of renewable expansion || Weather-related headwinds | Decreased output | Increased reliance on conventional resources |
Final Thoughts
The shift in power generation from renewables to conventional sources in Q1 2025 is largely due to the drastic drop in wind energy output caused by adverse weather conditions. Despite ongoing renewable project expansion, the weather variability and insufficient flexible backup options such as storage continue to pose challenges for Germany's energy transition. Governments, scientists, and industry experts are closely monitoring the situation and investigating solutions to minimize the impact of weather-related headwinds on renewable energy production.
- In the discussion concerning energy policy and the environment, the decline in wind power generation by 29.2 percent in Germany as a result of unfavorable weather conditions has led to a resurgence of conventional energy sources, as reported by the Federal Statistical Office.
- The shift in Germany's energy policy towards a higher dependence on conventional energy sources, specifically coal, natural gas, and other fossil fuels, can be linked to market and policy dynamics, including the dropping price cap for PV tenders and insufficient flexible backup options like storage, which has exacerbated price volatility and reliance on conventional power.
- In the realm of environmental-science and finance, efforts are underway among governments, scientists, and industry experts to address the challenges posed by weather variability affecting renewable energy production and to minimize the impact of weather-related headwinds on renewable energy expansion.
