Germany is ramping up wind power construction, yet multiple forces are converging to make the sector's path forward uncertain, according to a recent Barclays research note that drew on conversations with industry experts.
Marc Hamer, managing director at Greentech Partners and a former Nordex executive, told Barclays analysts that annual onshore wind installations in Germany reached roughly 5 gigawatts in 2025 and are expected to rise toward a peak of 7-8 GW per year over the next several years. That trajectory falls short of the German government's approximately 10 GW per year target, Hamer said, adding that the gap appears to be driven more by construction constraints than by weak demand.
The policy underpinning the current buildout is not guaranteed beyond the near term. The existing onshore wind auction regime - which gives developers a guaranteed tariff, compensates them for hours when negative power prices would have occurred, and provides re-dispatch payments when the grid is oversupplied - is scheduled to expire at the end of 2026. Barclays' note highlights that the incoming government’s more "pro-business" orientation could trigger partial or full changes to that framework.
Any adjustment to those provisions would likely increase uncertainty about project cash flows, Barclays warned, and could make it more difficult for developers to secure financing on the same terms.
Evidence of market strain has already appeared in auction outcomes. Prices at Germany’s most recent wind auction declined by more than 10% year-over-year, a move Barclays interprets as developers accelerating bids to lock in projects ahead of potential regulatory shifts - a demand "pull-forward" effect rather than a clear sign of longer-term price erosion.
The electricity network itself also shows signs of stress. Hamer pointed to a notable scale of re-dispatch events, where wind farms are curtailed because the grid cannot absorb their generation, and concluded that Germany’s network is effectively saturated with renewable output in its current configuration. Under today's rules, curtailed generators are still fully compensated for the power they could have produced but did not; a change to that compensation treatment would materially alter project economics.
For turbine manufacturers, these developments carry tangible implications. Barclays assigns Nordex SE an "equal weight" rating and a price target of 15.80, versus a closing price of 32.38 on Feb. 13, implying a potential downside of 51.2%. Vestas is rated "underweight" with a price target of DKK 80 compared with a DKK 153.60 close, representing a potential downside of 47.9%.
Barclays analysts noted that additional margin upside for wind original equipment manufacturers could be limited, given constrained price increases and largely optimized supply chains that have shifted to Asia. The presence of Chinese turbine manufacturers adds competitive pressure: Hamer observed that western OEMs are already finding it difficult to compete in emerging markets, and that Chinese operators have established a meaningful presence in Southern and Eastern Europe. He also noted that Germany’s relatively small average project size offers some protection to domestic OEMs, but that this does not remove the competitive threat entirely.
Siemens Energy faces distinct competitive dynamics. Barclays' report observes that recent German offshore wind auctions - where developers pre-select turbine suppliers - have seen limited participation from Siemens Energy, with the market largely divided among Vestas, Nordex and Enercon.
Market and financing outlook
The confluence of an expiring support regime, observable demand pull-forward in auctions, grid saturation and elevated competition suggests that the sector's current expansion may encounter headwinds. Developers, equipment suppliers and project financiers will be watching policy decisions closely, as any revision to compensation or re-dispatch rules would alter revenue certainty and capital markets' willingness to back projects on previous terms.
What remains clear from the data cited to Barclays: Germany's wind installations are growing in the near term, but the sustainability and financing of that growth depend on regulatory continuity, grid upgrades and how competition from lower-cost manufacturers evolves.