EEG Market Premium for Wind Energy
The market premium (Marktprämie) is the financial compensation between the reference value awarded under the EEG auction and the actual price achieved on the electricity spot market. The transmission system operator (TSO) pays it monthly to the plant operator.
Calculation Formula
Market premiummonth = reference value (anzulegender Wert) − monthly market valuewind
With site quality correction:
effective reference value = award value × site quality factor (Standortqualitätsfaktor) + south bonus (Südbonus)
Monthly Market Value Wind 2024–2026
| Year / Month | Market value wind [ct/kWh] |
|---|---|
| Jan 2025 | 5.8 |
| Apr 2025 | 4.2 |
| Jul 2025 | 3.5 |
| Oct 2025 | 5.1 |
| Jan 2026 | 6.3 |
| Apr 2026 | 3.9 |
| Annual average 2025 | 4.7 |
Market value wind = volume-weighted average of spot market prices during hours of wind power generation. Source: TSO publications.
Example Calculation
- Award value: 7.30 ct/kWh
- Site quality factor: 0.95 (slightly below reference)
- Correction factor: 1.06 (per EEG lookup table)
- South bonus: 0.30 ct/kWh
- Effective reference value: 7.30 × 1.06 + 0.30 = 8.04 ct/kWh
- Monthly market value wind April 2026: 3.90 ct/kWh
- Market premium April: 8.04 − 3.90 = 4.14 ct/kWh
- Total revenue per MWh = 3.90 (spot sale) + 4.14 (premium) − 0.15 (marketer fee) = 79 EUR/MWh
Historical Context: From Feed-in Tariff to Market Premium
Until 2012, wind turbine operators received a fixed feed-in tariff regardless of the actual market price of the electricity produced. The switch to the market premium model (mandatory since 2014) was meant to bring renewable energy plants closer to the electricity market: the operator sells the power itself — typically through a direct marketer — on the exchange and additionally receives the difference to the guaranteed reference value as a market premium. Economically, the operator remains protected at a fixed revenue level for the entire subsidy period, while at the same time being exposed to market signals — for instance, negative prices can directly reduce revenue once the loss-of-premium rule applies.
Fallback Compensation as a Backstop Mechanism
If an operator cannot conclude a direct marketing contract for technical or organizational reasons — for example because no direct marketer is available —, the so-called fallback compensation (Ausfallvergütung) under Section 38 EEG applies. It is regularly below the level achievable through the regular market premium and is intended as a backstop, not as an equivalent alternative. In practice, fallback compensation is the exception for established wind projects, since virtually every operator concludes a direct marketing contract with one of the established providers (e.g. Statkraft, EnBW Trading, Next Kraftwerke).
Market Premium versus PPA — an Economic Comparison
The market premium guarantees a defined reference value over the entire 20-year subsidy period, taking on the operator's electricity market price risk — except for loss-of-premium hours during strongly negative prices. A PPA, by contrast, shifts this price risk contractually to an industrial buyer or energy trader, usually at a price fixed or capped for the contract term. For plants that drop out of the 20-year EEG subsidy (see repowering section), the PPA is regularly the only remaining revenue source, unless a renewed auction award (see auctions) is secured through a repowering project.
Loss of Market Premium
- Negative price rule: no market premium for hours with negative spot prices, if the negative prices persist for more than 4 consecutive hours
- Gross/net market value: during negative-price hours the gross value (including premium) applies unless the loss-of-premium rule triggers
- Balancing deviations: borne by the direct marketer, not the plant operator
Role of the Direct Marketer
The direct marketer handles the operational sale of electricity on the exchange (typically EPEX Spot) on the operator's behalf, along with schedule and balancing group management. In return, it charges a marketing fee that, depending on the provider and contract term, typically ranges between about 0.10 and 0.30 ct/kWh and has already been deducted in the example calculation above. When choosing a direct marketer, it is worth comparing several offers, since marketing fees, forecast quality (which affects balancing energy costs) and contract flexibility (term, notice periods) can differ noticeably between providers. Larger portfolios can also tap additional revenue sources such as balancing power marketing through specialized marketers, which is usually not economically viable for single plants.
Forecast Risk and Balancing Energy
The direct marketer must submit a daily feed-in forecast to the balancing group operator. If actual feed-in deviates from the forecast — for example because a weather front moves differently than predicted — balancing energy costs arise, which depending on the contract terms remain wholly or partly with the direct marketer and are not passed on to the plant operator. When reviewing a direct marketing contract, it is therefore important to clarify exactly who economically bears the forecast risk — a detail that is handled differently across standard contracts and can affect the operator's actual net margin.
Site Quality Factor Correction
The evaluation is conducted after 5, 10 and 15 years — actual yield is compared to the reference yield, and the reference value is adjusted retroactively:
| Achieved yield vs. reference | Correction factor |
|---|---|
| 100% (reference) | 1.00 |
| 90% | 1.11 |
| 80% | 1.29 |
| 70% | 1.49 |
| 60% | 1.77 |
| 50% (lower bound) | 2.07 |
Need a profitability model for your wind project?
We broker to energy auditors specializing in cash-flow modelling with market premium scenarios — including negative-price stress tests.
Get in touchCommon Questions
Who pays the market premium?
The transmission system operator (50Hertz, Amprion, TenneT, TransnetBW), refinanced through the EEG surcharge / KfW Climate Transformation Fund.
How long does the market premium run?
20 years from commissioning, then transition to unsubsidized direct marketing without premium.
What happens with more than 4 hours of negative spot prices?
The market premium is forfeited entirely for those hours. In 2024, approximately 60 hours per year were affected — the trend is rising, making this an increasingly relevant profitability factor.
Can I switch between the market premium and a PPA?
In principle yes — switching to unsubsidized direct marketing without the market premium is possible but must be reported to the TSO. Switching back to the subsidized market premium is likewise possible, though subject to notification deadlines that should be checked for the specific case.
What is the long-term effect of the cannibalization effect?
As the share of wind in the electricity mix rises, the market value for wind tends to fall precisely during the hours when a lot of wind power is being generated — a structural effect already visible in market value time series from recent years. The market premium cushions this effect for the individual operator, but shifts the cost onto the EEG surcharge financing.