The summer of 2025 is drawing to a close. It has been marked more by political than meteorological head-lines in Central and Northern Europe. In August, the American and Russian presidents met at a summit that raised not only geopolitical tensions but also far-reaching energy policy issues regarding cooperation be-tween the world powers. Although no ceasefire was reached in Ukraine, projects such as Arctic LNG 2 and Sakhalin 1, which are affected by sanctions, took center stage. Putin signed a decree that could allow West-ern investors such as Exxon to re-enter these projects. These geopolitical developments could stabilize global energy supplies in the long term and thus also influence prices in Europe.
The International Energy Agency (IEA) takes a similar view, forecasting strong growth in global power demand of 3.3% and 3.7% for 2025 and 2026, respectively, in its latest “Power Mid-Year Update.” The drivers are factories, cooling, data centers (especially in the US), and e-mobility. Renewable energies could replace coal as the most important source of power as early as 2025, supported by growing nuclear energy and more gas power. China and India account for 60% of the global increase in demand. The IEA is not alone in emphasiz-ing that with increasing global electrification, flexibility, storage, and coordinated regulation are crucial.
While the IEA focuses on the global context, Europe is part of the worldwide complexity—and at the same time part of the increasing need for flexibility and the continued growth of renewable energies with their own fragmented challenges. Many European countries are pushing ahead with the expansion of renewable energies. Above all, the sharp rise in PV capacities is posing challenges for grids and regulation. Repeated for years, but now more urgent than ever: renewables alone are not enough; grid expansion, storage, and flexibility options are also needed. On August 22, 2025, the German Energy Industry Association wrote: The power generated must be made usable, generation, storage, and grids must be more closely synchronized, and flexibility options such as storage, electrolysers, and flexible consumers must be consistently developed. Such demands are not new – similar statements have been made for over a decade. However, implementa-tion is proving difficult, partly because national laws vary greatly. A look at current developments reveals common goals, but very different approaches.
• Czechia: In March 2025, Czechia passed “Lex OZE III”: power storage and grid flexibility are enshrined in law, grid tariffs are adjusted, and virtual power plants are enabled.
• Slovakia introduced flexible grid connections: Renewable energy plants may be connected to the grid on a temporary basis or with reduced output. Grid operators must report capaci-ties more transparently, and procedures are being digitized. A framework for power commu-nities and CfD subsidies for renewable energy and nuclear power plants has been created.
• Romania requires prosumers to install storage: PV systems up to 400 kW must have storage capacity of 30–50% of their output, and older systems must be retrofitted by 2027. Feed-in must not exceed the storage capacity. Grid fees do not apply to stored power. At the same time, CfD systems and offshore wind laws have been established.
• Bulgaria has recently allowed energy communities and aggregators. Battery storage systems are now separate types of installations with simplified connection approval procedures.
• Slovenia has required municipalities with more than 10,000 inhabitants to set up renewable energy communities. PV and storage can be registered as flex resources. Time- and perfor-mance-based grid fees are intended to manage loads.
• Croatia is working on a new law for prosumers and energy communities, including a central register at HERA. Auctions for solar and wind energy subsidies have been made permanent.
• Poland is planning interruptible connections: renewable energy plants can be temporarily shut down in the event of grid congestion. Grid operators must make available capacities transparent online,
• France passed an acceleration law in 2023: planning zones for renewable energy projects, accelerated approvals, and storage projects are prioritized in the same way as renewable energy plants. In addition, demand response and capacity mechanisms are being strength-ened to bring flexibility to the system.
The overview shows that EU member states are pursuing the same goals—grid integration, flexibility, stor-age—but are implementing them with different regulations. This makes it difficult to standardize the Euro-pean energy market and requires a great deal of adaptability on the part of stakeholders. Nevertheless, many measures make sense because they offer locally appropriate solutions for the integration of renewable ener-gies.
If we turn our attention to the specific market movements in August, renewables continue to play an im-portant role, as usual. The power spot market showed a calm development in August, with one exception at the beginning of the month. In the first week, the German spot market averaged 59.66 EUR/MWh, the sec-ond-lowest value of the year. This was mainly due to high generation from renewable energies, with wind and photovoltaics together producing 113% of the norm. In the following weeks, however, spot prices rose moderately to around EUR 80/MWh due to reduced generation and a heat wave that particularly limited French nuclear power production. This led to a price level that is expected to continue into the beginning of September.
The power futures market also showed relatively calm development, with minor volatility of 4% in the stable monthly range between EUR 83/MWh and EUR 87/MWh for the German front-year product. The gas market showed a similar development, with prices falling from EUR 35.32/MWh at the beginning of the month to EUR 32.56/MWh and then recovering slightly. These price fluctuations were largely due to speculative movements and geopolitical uncertainty. In particular, uncertainty about the impact of the meetings be-tween Trump and Putin and maintenance work on the Norwegian gas infrastructure contributed to the mar-ket situation.
The outlook for the energy market remains exciting. After a quiet summer period, trading activity is expected to increase, particularly in the power market. The gas market could continue to be affected by upcoming maintenance work on Norwegian infrastructure and continued storage in Europe. The geopolitical situation, for example in relation to EU LNG imports and Russian gas supplies, also remains an important factor. In the short term, power prices are expected to rise slightly, while gas prices could fall slightly due to the stable supply situation. In the long term, the market will depend on progress in the energy transition and renewa-ble energy expansion targets. If the targets for the expansion of photovoltaics are not achieved by 2030, CO2 prices and thus also power prices could rise, which would have a lasting impact on market conditions in Europe.
The summer of 2025 is drawing to a close. It has been marked more by political than meteorological head-lines in Central and Northern Europe. In August, the American and Russian presidents met at a summit that raised not only geopolitical tensions but also far-reaching energy policy issues regarding cooperation be-tween the world powers. Although no ceasefire was reached in Ukraine, projects such as Arctic LNG 2 and Sakhalin 1, which are affected by sanctions, took center stage. Putin signed a decree that could allow West-ern investors such as Exxon to re-enter these projects. These geopolitical developments could stabilize global energy supplies in the long term and thus also influence prices in Europe.
The International Energy Agency (IEA) takes a similar view, forecasting strong growth in global power demand of 3.3% and 3.7% for 2025 and 2026, respectively, in its latest “Power Mid-Year Update.” The drivers are factories, cooling, data centers (especially in the US), and e-mobility. Renewable energies could replace coal as the most important source of power as early as 2025, supported by growing nuclear energy and more gas power. China and India account for 60% of the global increase in demand. The IEA is not alone in emphasiz-ing that with increasing global electrification, flexibility, storage, and coordinated regulation are crucial.
While the IEA focuses on the global context, Europe is part of the worldwide complexity—and at the same time part of the increasing need for flexibility and the continued growth of renewable energies with their own fragmented challenges. Many European countries are pushing ahead with the expansion of renewable energies. Above all, the sharp rise in PV capacities is posing challenges for grids and regulation. Repeated for years, but now more urgent than ever: renewables alone are not enough; grid expansion, storage, and flexibility options are also needed. On August 22, 2025, the German Energy Industry Association wrote: The power generated must be made usable, generation, storage, and grids must be more closely synchronized, and flexibility options such as storage, electrolysers, and flexible consumers must be consistently developed. Such demands are not new – similar statements have been made for over a decade. However, implementa-tion is proving difficult, partly because national laws vary greatly. A look at current developments reveals common goals, but very different approaches.
• Czechia: In March 2025, Czechia passed “Lex OZE III”: power storage and grid flexibility are enshrined in law, grid tariffs are adjusted, and virtual power plants are enabled.
• Slovakia introduced flexible grid connections: Renewable energy plants may be connected to the grid on a temporary basis or with reduced output. Grid operators must report capaci-ties more transparently, and procedures are being digitized. A framework for power commu-nities and CfD subsidies for renewable energy and nuclear power plants has been created.
• Romania requires prosumers to install storage: PV systems up to 400 kW must have storage capacity of 30–50% of their output, and older systems must be retrofitted by 2027. Feed-in must not exceed the storage capacity. Grid fees do not apply to stored power. At the same time, CfD systems and offshore wind laws have been established.
• Bulgaria has recently allowed energy communities and aggregators. Battery storage systems are now separate types of installations with simplified connection approval procedures.
• Slovenia has required municipalities with more than 10,000 inhabitants to set up renewable energy communities. PV and storage can be registered as flex resources. Time- and perfor-mance-based grid fees are intended to manage loads.
• Croatia is working on a new law for prosumers and energy communities, including a central register at HERA. Auctions for solar and wind energy subsidies have been made permanent.
• Poland is planning interruptible connections: renewable energy plants can be temporarily shut down in the event of grid congestion. Grid operators must make available capacities transparent online,
• France passed an acceleration law in 2023: planning zones for renewable energy projects, accelerated approvals, and storage projects are prioritized in the same way as renewable energy plants. In addition, demand response and capacity mechanisms are being strength-ened to bring flexibility to the system.
The overview shows that EU member states are pursuing the same goals—grid integration, flexibility, stor-age—but are implementing them with different regulations. This makes it difficult to standardize the Euro-pean energy market and requires a great deal of adaptability on the part of stakeholders. Nevertheless, many measures make sense because they offer locally appropriate solutions for the integration of renewable ener-gies.
If we turn our attention to the specific market movements in August, renewables continue to play an im-portant role, as usual. The power spot market showed a calm development in August, with one exception at the beginning of the month. In the first week, the German spot market averaged 59.66 EUR/MWh, the sec-ond-lowest value of the year. This was mainly due to high generation from renewable energies, with wind and photovoltaics together producing 113% of the norm. In the following weeks, however, spot prices rose moderately to around EUR 80/MWh due to reduced generation and a heat wave that particularly limited French nuclear power production. This led to a price level that is expected to continue into the beginning of September.
The power futures market also showed relatively calm development, with minor volatility of 4% in the stable monthly range between EUR 83/MWh and EUR 87/MWh for the German front-year product. The gas market showed a similar development, with prices falling from EUR 35.32/MWh at the beginning of the month to EUR 32.56/MWh and then recovering slightly. These price fluctuations were largely due to speculative movements and geopolitical uncertainty. In particular, uncertainty about the impact of the meetings be-tween Trump and Putin and maintenance work on the Norwegian gas infrastructure contributed to the mar-ket situation.
The outlook for the energy market remains exciting. After a quiet summer period, trading activity is expected to increase, particularly in the power market. The gas market could continue to be affected by upcoming maintenance work on Norwegian infrastructure and continued storage in Europe. The geopolitical situation, for example in relation to EU LNG imports and Russian gas supplies, also remains an important factor. In the short term, power prices are expected to rise slightly, while gas prices could fall slightly due to the stable supply situation. In the long term, the market will depend on progress in the energy transition and renewa-ble energy expansion targets. If the targets for the expansion of photovoltaics are not achieved by 2030, CO2 prices and thus also power prices could rise, which would have a lasting impact on market conditions in Europe.
Good luck with your energy decisions!
Yours, Felix Diwok
For the Inercomp Team