The risk of insolvency for new wind power projects in Germany is increasing significantly because negative electricity prices are on the rise, the planned reform of the Renewable Energy Sources Act (EEG) will reduce subsidies, grid operators will be allowed to refuse new connections, and compensation for grid-related shutdowns is slated to be eliminated. At the same time, many projects lack immediate safeguards for eventual decommissioning, as often only annual reserves are planned. This is precisely the decisive risk factor, because in the event of economic failure, there is a risk of unsecured decommissioning, environmental liabilities, and unresolved liability issues. Therefore, not only operators and investors are affected, but also municipalities and ultimately the general public. Permitting authorities thus assume a key role, as they can no longer ignore the economic viability of new projects. (tkp: 26.03.26)
Negative electricity prices lead to a new insolvency risk
The economic pressure is primarily generated on the electricity exchange. According to forecasts by the London Stock Exchange Group, Germany is expected to experience around 810 hours of negative spot prices in 2026. This would represent an increase of 46 percent. France is projected to see 1,240 hours, the Netherlands 894, and the UK 234. This development fundamentally alters the profitability of new wind farms, as government subsidies cease precisely during such periods.
However, costs continue to accrue. Rents, loans, maintenance, and operating expenses don’t disappear, while revenues dwindle. If plants have to be curtailed due to oversupply, the imbalance worsens. This makes the business model less reliable for investors, while the risk of insolvency becomes a factor in their calculations. A politically supported expansion project is thus increasingly becoming a venture with open market and default risks.
Reform of the Renewable Energy Sources Act (EEG) Shifts the Burden to Operators
The planned reform of the Renewable Energy Sources Act (EEG) further intensifies this trend. Subsidies and grants are to be reduced by around 25 percent, while the guaranteed feed-in tariff will be largely eliminated. In the future, plants will primarily generate revenue when their electricity directly benefits the grid. Grid operators will also be permitted to reject new plants if local grids are already at capacity. Compensation for grid-related shutdowns will also be eliminated.
This shifts the economic risk directly to the operators. Those who build under these conditions no longer only bear weather, construction, and financing risks, but also the consequences of overproduction, grid bottlenecks, and volatile stock market prices. Added to this is the pressure to invest in storage or other technical solutions simply to be considered grid-serving. This increases both capital requirements and uncertainty. For many projects, this not only increases financing costs but also the risk of insolvency over the entire project lifecycle.
Authorities Must Reassess Economic Viability and Decommissioning
Legally, the situation is clearer than some permitting practices might suggest. According to Section 35 of the Administrative Procedure Act (VwVfG), authorities must properly weigh public and private interests against each other. This includes not only the technical operation but also the economic viability of a project. A project that is likely to fail will later jeopardize environmental and financial interests. The precautionary principle enshrined in Article 20a of the Basic Law (GG), Section 5 Paragraph 1 No. 1 of the Federal Immission Control Act (BImSchG), and Section 4 of the Environmental Impact Assessment Act (UVPG) points in the same direction.
Case law also sets clear limits. The Federal Administrative Court has ruled that economic infeasibility can constitute a deficiency in the balancing of interests. The Higher Administrative Court of Lüneburg has further emphasized that sufficient security may be mandatory in cases of impending insolvency. Authorities must therefore require an independent economic viability assessment, a robust decommissioning and disposal plan, and readily available security such as a bank guarantee. Annual reserves alone are often insufficient. Anyone who grants approval without this evidence is shifting identifiable risks into the future and potentially onto the general public.