Electricity has never been so expensive in Germany in February. New government is betting on a return to fossil fuels

Alarm bells are starting to ring in Germany, with electricity prices hitting record levels for the month of February, reaching an average of 128 euros per megawatt-hour, largely due to a reduction in wind generation, reports Bloomberg, citing data from Epex Spot SE.

This figure means that the cost of energy in the country has exceeded that of any other February so far. This is also the highest price recorded in Europe's largest economy this winter, having even surpassed the historical highs of the energy crises of 2022 and 2023.

However, analysts expect solar generation to start increasing in the coming months and help to reduce wholesale prices. This unusual increase comes at a time when high electricity bills are a significant concern for both German households and major industries in Europe’s largest economy.

Low wind power production this winter in some European countries has highlighted the need to increase renewable energy production, particularly in Germany, where the impact of high energy costs has hit the economy hard and led to political change in the country.

In December, market prices surpassed the 1,150 euros per MWh barrier, according to data from the Epex Spot platform. The same was true in some neighboring countries and regions, such as Denmark, the Netherlands and southern Norway.

In central and northern Europe, this phenomenon of high energy prices can be explained by the reduction in daily hours of sunlight (with the approach of the winter solstice), combined with a shutdown of wind turbines due to the lack of wind in central European countries. This has led Germany and its neighbours to have to resort to natural gas to produce electricity in thermal power plants, in higher quantities than have been seen since the peak of the energy crisis in 2022.

Added to this is the fact that other countries in the region, such as Sweden and Austria, are in a very similar situation and cannot compensate for the lack of electricity production in Germany.