Germany’s Energy Demand Falls as High Prices Hit Oil Consumption

Germany's energy demand contracted by 1.9% in the first half of the year due to high oil and gas prices, according to preliminary data from the Working Group on Energy Balances AGEB. Oil product usage plummeted by 8%, with diesel consumption dropping by nearly 6% and gasoline use falling by 0.6%. Jet fuel consumption fell by 1%, while light heating oil consumption dropped by more than 30%.

Coal consumption surged by 7%, and natural gas usage rose by 1.3%, though hydrocarbons still made up 75.9% of the country's energy consumption. Wind and solar generation expanded significantly, contributing 22.2% of overall energy consumption, up from 20.9% the previous year. This increase was primarily driven by wind power, while hydro usage declined by 7.7%.

Germany's electricity generation was dominated by hydropower, wind, and solar, reaching an all-time high of 58% in the first half, up from 55.8% the year before. The rise in wind generation was countered by the fall in hydro usage, and the transition plan has encountered challenges such as a prolonged wind drought and transmission capacity limits. Overcoming these obstacles will necessitate billions in grid expansion investments.