German Onshore Wind Sector: Seizing Value Before Policy Shifts

Germany's onshore wind sector is at a pivotal juncture, driven by ambitious climate targets, regulatory reforms, and a surge in repowering projects. With the government aiming to increase onshore wind capacity from 64 GW in 2023 to 115 GW by 2030Nordex Group enters 2025 on a strong footing with improved margins, positive free cash flow and confirmation of full year guidance^[1], the sector is experiencing a critical window for investors to capitalize on pre-policy-shift opportunities. As subsidy frameworks evolve and market-based mechanisms gain prominence, leading firms like Nordex, Siemens Gamesa, and Enercon are strategically positioning themselves to maximize returns before regulatory transitions take full effect.

Regulatory Reforms and Market Dynamics

The 2025 coalition agreement between the CDU/CSU and SPD has reinforced Germany's commitment to climate neutrality by 2045, with renewables accounting for 80% of electricity production by 2030Nordex Group enters 2025 on a strong footing with improved margins, positive free cash flow and confirmation of full year guidance^[1]. To meet these targets, the government has streamlined permitting procedures under the 2024 revision of the Federal Immission Control Act (BImSchG), extending project deadlines and easing site change conditionsSiemens Energy reports growth; Siemens Gamesa remains under pressure^[4]. These reforms have catalyzed a record 14 GW of newly permitted projects in 2024 and nearly 11 GW of support contracts awarded through tendersGermany’s Onshore Wind Repowering Accelerates Towards 2030 Targets^[3]. However, grid infrastructure remains a bottleneck, requiring €50 billion in investments by 2030 to integrate expanding wind capacitySiemens Energy reports growth; Siemens Gamesa remains under pressure^[4].

The subsidy landscape is also shifting. Germany is phasing out fixed-price support for new projects, transitioning to market-based mechanisms like contracts for difference (CfDs) and revenue clawback modelsGerman onshore wind growth forecast to reach 5 GW in 2025 on record permits^[2]. This shift aims to reduce fiscal burdens while aligning renewable producers with market realities. For instance, the government no longer guarantees minimum prices if electricity prices fall below zero—a scenario increasingly common during periods of oversupplyGermany’s Onshore Wind Repowering Accelerates Towards 2030 Targets^[3]. These changes introduce uncertainty for developers but also create opportunities for firms with strong balance sheets and diversified revenue streams.

Leading Firms and Strategic Investments

Nordex has emerged as a dominant player in Germany's onshore wind market. In 2024, the company supplied 32% of newly connected onshore wind power, installing 196 turbines with a combined 1.06 GW of capacityGerman onshore wind growth forecast to reach 5 GW in 2025 on record permits^[2]. Its Q1 2025 performance underscored this momentum, with an EBITDA of €79.6 million and a 5.5% marginNordex Group enters 2025 on a strong footing with improved margins, positive free cash flow and confirmation of full year guidance^[1]. Nordex is leveraging its market leadership to secure large-scale projects, such as the 56 MW Drochtersen wind farm in Lower SaxonySiemens Energy reports growth; Siemens Gamesa remains under pressure^[4]. The company's focus on repowering—replacing older turbines with larger, more efficient models—positions it to benefit from current EEG subsidies before the transition to market-based mechanisms.

Siemens Gamesa, despite ongoing financial challenges, remains a key player in repowering initiatives. The firm's Elster Wind Farm project in Saxony-Anhalt replaced 50 outdated turbines with 16 modern 6.6 MW units, boosting electricity generation sixfold while reducing land use by one-thirdNordex Group enters 2025 on a strong footing with improved margins, positive free cash flow and confirmation of full year guidance^[1]. This project exemplifies how repowering can enhance output and environmental performance, aligning with Germany's 2030 targets. However, Siemens Gamesa faces headwinds, with projected losses of €1.3 billion in 2025 and a restructuring plan targeting break-even by 2026Siemens Energy reports growth; Siemens Gamesa remains under pressure^[4]. Investors must weigh its strategic focus on high-growth markets like Germany against operational risks.

Enercon is capitalizing on its direct-drive technology and strategic partnerships to strengthen its market position. The company recently secured a €800 million partnership with enercity Erneuerbare to deploy over 100 turbines by 2025Siemens Energy reports growth; Siemens Gamesa remains under pressure^[4]. Additionally, its collaboration with NeXtWind—a platform with a 18 GW project pipeline—highlights its role in scaling repowering effortsSiemens Energy reports growth; Siemens Gamesa remains under pressure^[4]. Enercon's emphasis on localized production and service networks provides a competitive edge in a sector where supply chain resilience is critical.

Financial Performance and Market Positioning

The financial health of these firms varies. Nordex's Q1 2025 results, including a 3% increase in turbine production to 1,210 MW, reflect strong demand for its productsNordex Group enters 2025 on a strong footing with improved margins, positive free cash flow and confirmation of full year guidance^[1]. In contrast, Siemens Gamesa's struggles underscore the sector's volatility, with the firm targeting a 10% operating margin by 2026Siemens Energy reports growth; Siemens Gamesa remains under pressure^[4]. Enercon's partnerships, meanwhile, offer visibility into future revenue streams, particularly as repowering projects account for 17 GW of potential capacity upgradesGermany’s Onshore Wind Repowering Accelerates Towards 2030 Targets^[3].

Investor sentiment is also influenced by subsidy dynamics. For example, NeXtWind's €1.4 billion debt financing for repowering projects by 2028Siemens Energy reports growth; Siemens Gamesa remains under pressure^[4] demonstrates confidence in the sector's ability to attract capital despite regulatory uncertainty. Similarly, global energy firms like TotalEnergies are acquiring German wind assets, signaling broader institutional supportSiemens Energy reports growth; Siemens Gamesa remains under pressure^[4].

Actionable Opportunities Before Policy Shifts

Investors should prioritize projects and firms that align with Germany's near-term targets. Key opportunities include:
1. Repowering Projects: Firms like Siemens Gamesa and Enercon are optimizing existing sites to maximize output under current EEG subsidies. The Elster Wind Farm and enercity partnership are prime examplesNordex Group enters 2025 on a strong footing with improved margins, positive free cash flow and confirmation of full year guidance^[1]Siemens Energy reports growth; Siemens Gamesa remains under pressure^[4].
2. Grid-Ready Capacity: Companies with projects in regions with advanced grid infrastructure, such as Nordex's Drochtersen wind farm, are better positioned to avoid delaysSiemens Energy reports growth; Siemens Gamesa remains under pressure^[4].
3. Financing Innovations: Debt financing and partnerships, as seen with NeXtWind and Enercon, provide liquidity to scale projects ahead of subsidy reformsSiemens Energy reports growth; Siemens Gamesa remains under pressure^[4].

Conclusion

Germany's onshore wind sector is a linchpin of its energy transition, with regulatory reforms and market dynamics creating both challenges and opportunities. For investors, the window to capitalize on current subsidy frameworks is narrowing, making strategic investments in firms like Nordex, Siemens Gamesa, and Enercon increasingly critical. By focusing on repowering, grid readiness, and innovative financing, these firms are not only navigating policy shifts but also shaping the future of renewable energy in Europe.