A study on electricity demand in Germany through 2030 has shown that the expansion of renewable energy sources could significantly influence electricity prices.
An analysis by the research institute Agora Energiewende highlights that continuing with the planned development of renewables pays off. Increasing wind and solar capacity over the next five years could lower the wholesale electricity price by up to 23 percent.
The study analyzes electricity price trends under two scenarios. The first scenario anticipates rapid growth in demand due to increased use of electric vehicles, heat pumps, and climate-neutral industrial production, leading to a total electricity consumption of around 708 TWh.
In this case, if the planned expansion of renewables continues, the average wholesale electricity price would drop from €101 to €81 per MWh, resulting in annual savings of around €14 billion for consumers. Supporting this level of renewable energy expansion would require annual subsidies between €7.5 and €7.7 billion. For every euro of subsidy, the electricity price would decrease by approximately €1.90 per MWh.
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The second scenario assumes slower demand growth due to a delayed rollout of electric vehicles and heat pumps, with total consumption estimated at around 609 TWh. If, in this case, the development of renewable energy were reduced by about 45 percent compared to the original plans, the average wholesale electricity price would be around €85 per MWh. However, if renewable development continues as planned, the price could fall to approximately €65 per MWh, generating savings of around €12 billion per year for consumers.
Additional subsidy costs in this scenario would range from €7 to €7.8 billion annually, with each euro invested in supporting renewables reducing the electricity price by about €1.60 per MWh.
“Studies that currently assume lower electricity demand by 2030 and, based on that, call for reduced renewable targets—are ignoring reality. Not only has there been strong demand for heat pumps in the first quarter of 2025, but we are also expecting a boom in electric vehicles. Furthermore, the federal government aims to make Germany a global leader in the development of data centers and the application of artificial intelligence, as well as to decarbonize industry with green energy,” said Simone Peter from the German Renewable Energy Federation.
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