Germany's May 2026 electricity prices soar 26% as Iran tensions disrupt energy markets

Electricity prices in Germany surged in May 2026, rising by 26% compared to the previous year. The spike came as geopolitical tensions in Iran disrupted energy markets, pushing wholesale costs from €69 to €88 per megawatt-hour. Despite this, renewables continued to dominate the country’s power supply. The conflict in Iran sent shockwaves through global energy markets, driving up Germany’s electricity prices. Wholesale costs climbed sharply, reaching €88 per megawatt-hour—a significant jump from €69 in May 2025. Without renewable energy, analysts estimated that prices would have been nearly 45% higher.

Renewables still accounted for 68.1% of Germany’s electricity generation in May 2026. Solar power led the way, hitting a record 10.9 terawatt-hours and becoming the top energy source. Wind generation, however, lagged behind its usual output, falling below long-term averages.

With renewables underperforming in some areas, fossil fuels filled the gap. Coal production rose from 4.8 to 6.4 terawatt-hours year-over-year. Gas output also increased, climbing from 2.2 to 3.1 terawatt-hours over the same period. Meanwhile, hydropower generation dropped to a historic low of just 1.27 terawatt-hours. The combination of geopolitical instability and uneven renewable output forced Germany to rely more on fossil fuels in May 2026. While solar power set new records, the overall energy mix saw higher contributions from coal and gas. The price surge highlighted the country’s ongoing dependence on both renewables and traditional energy sources.