The expansion of wind power continues, but economic reality contradicts political promises. Despite years of subsidies, guaranteed feed-in tariffs, and billions in government aid, electricity prices remain high, while rising costs and high interest rates render many projects unprofitable. The decisive risk factor lies in the ongoing dependence on political intervention, without which the economic viability of numerous projects would be unsustainable. Consumers, businesses, and industry are affected, as they continue to pay high energy prices. At the same time, many projects are collapsing economically because declining returns and cautious investors are hindering new investments.
Government subsidies are no substitute for a functioning market
Wind power has received massive political support for years, but this has not resulted in a self-sustaining market. Tenders, market premiums, and guaranteed feed-in tariffs ensure revenue, while the government mitigates price risks. As a result, a large part of the economic viability depends directly on political decisions.
At the same time, the costs don’t disappear; they simply shift to a different part of the system. The former EEG surcharge is now financed from the federal budget, meaning taxpayers continue to bear the cost of subsidies. Therefore, government support remains the core of the model, even if the burden on electricity bills is less visible.
Electricity Prices Remain High Despite Expansion
The central aim of the energy transition was long to make electricity cheaper through renewable energies. However, reality shows the opposite, as Germany continues to be among the countries with the highest electricity prices in Europe. While prices have recently declined somewhat, the level remains high for households and businesses.
Furthermore, grid expansion, reserve capacities, and interventions in the electricity system are driving costs up. The government has to subsidize grid fees with billions to prevent prices from rising even further. This makes it clear that relief often doesn’t stem from genuine economic viability, but rather from new government subsidies.
Costs, Interest Rates, and Weak Returns Hinder Expansion
The economic basis of many wind energy projects is weakening because construction, materials, and financing have become significantly more expensive. Higher interest rates are squeezing profitability, while rising costs are making every calculation more difficult. As a result, even politically supported projects are failing.
Investors are therefore holding back their capital more frequently, while projects are being postponed or canceled altogether. At the same time, expected returns are shrinking, making it harder to finance new projects. This illustrates a system that is losing stability without sustained support.
Citizens and businesses bear the brunt
While parts of the industry have long benefited from secure subsidies, consumers and businesses continue to foot the bill. Households are burdened with high electricity prices, while small and medium-sized enterprises (SMEs) suffer from rising energy costs. At the same time, industry is losing competitiveness.
Government relief measures do not solve the problem; they merely shift the burden. Subsidies for grid fees or subsidies reduce the pressure on electricity bills, but the bill ultimately falls on the taxpayer. Therefore, the burden remains, even if it is distributed differently.
The energy transition reveals its economic weaknesses
The development of wind power reveals fundamental problems with German energy policy. A system that is permanently dependent on subsidies cannot sustain itself. At the same time, the demands on grids, storage facilities, and security of supply are increasing.
Therefore, the situation reveals more than just a sectoral crisis. It demonstrates that political goals and economic realities are far apart. Without fundamental changes, high costs, persistent dependencies, and new burdens for the entire economy will persist. (KOB)