Illustration of climate protest in Berlin symbolizing Germany’s debate on energy policy and renewable transition ahead of the federal election

With Germany on the brink of a pivotal election, we want to share our high-level views on energy policy and the key considerations for voters. We’ve outlined five fundamental theses to keep this concise and to the point.

Chart of German day-ahead electricity market showing average price levels and HL spread, illustrating the 2024 decoupling of volatility from overall prices due to renewables and the need for short-term flexibility

Electricity (cross-product) price volatility has historically been closely linked to overall price levels. This trend seems to have ended in 2024 in Germany, as low marginal cost renewables are pushing the overall wholesale price level down, while peakers such as gas and batteries need to finance their investments in relatively few but increasingly expensive production hours