Wind Power in Germany Rises by 27 Percent in the First Quarter of 2026 - Why Electricity Prices are Falling
Münster (Germany) - Wind energy in Germany saw a strong increase at the beginning of 2026 compared to the previous year. In the first three months, electricity generation from wind turbines rose by 27 percent. During the same period, electricity prices on the exchange fell by 8.9 percent.
Onshore and offshore wind power generation increase significantly at the start of 2026
Both on land and at sea, wind power production recorded substantial growth. Onshore wind turbines increased their output by 23.1 percent to 33.1 billion kWh (Q1 2025: 26.9 billion kWh). Offshore wind energy developed even more dynamically: here, electricity generation rose by 44.8 percent to 9.7 billion kWh (Q1 2025: 6.7 billion kWh).
The main drivers of this development are the strong expansion of new wind turbines in 2025, with a net increase of over 5,000 megawatts, as well as overall more favorable wind conditions in the first quarter of 2026 compared to the previous year.
Why more wind power lowers electricity prices - merit order on the electricity exchange
The expansion of wind energy also had a noticeable impact on electricity prices in Germany in 2026: the average wholesale electricity prices fell to 10.2 cents per kWh between January and March (previous year: 11.2 cents per kWh). This corresponds to a decrease of 8.9 percent.
„The sharp increase in wind power generation has significantly eased the electricity market. Without this growth, Germany would have had to rely more heavily on comparatively expensive gas-fired power plants - with correspondingly higher stock exchange electricity prices,” said IWR CEO Dr. Norbert Allnoch. In the public sphere, the way prices are formed on the electricity exchange is largely unknown. Contrary to common belief, there is no single average price for electricity determined on the exchange.
Instead, marginal costs are used. In every 15-minute auction, the most expensive power plant (currently gas) sets the electricity price. All other producers receive this highest price, regardless of how low their bids were.
With current gas prices of around €48/MWh (= 4.8 cents/kWh) and an assumed efficiency of 50 percent for gas-fired power plants, the variable fuel costs alone amount to about 9.5 cents/kWh on the electricity exchange.
The more renewable energy displaces expensive gas-fired power plants, the lower the clearing price becomes - and electricity prices fall. Conversely, if the use of expensive power plants increases, electricity prices on the exchange - and ultimately for consumers - also rise.
Source: IWR Online, Apr 04 2026