Germany's electricity bills could rise as El Niño drives gas prices and EU taps North African renewables

The El Niño climate pattern is expected to increase heat and drought in South‑East and South‑Asia, reducing hydroelectric output and boosting demand for natural gas and liquefied natural gas (LNG). This shift can divert LNG shipments to Asia, tightening the global market and pushing European gas prices higher. The International Energy Agency estimates that extreme heat contributed about 20 % of the 2024 rise in global power and gas demand. Analysts project the European gas benchmark (TTF) to average around $9.81 per mmBtu by the end of 2025, down from $14.20 earlier in the year, but El Niño‑related competition could keep prices above expectations, affecting German household energy costs depending on supplier contracts and storage levels.

Meanwhile, the European Union has announced a €25 billion investment to develop solar and wind capacity in North Africa and the Middle East. The plan targets 15 GW of new renewable generation by 2035, enough to supply electricity for roughly ten million European homes. EU Commissioner for the Mediterranean, Dubravka Šuica, highlighted that solar‑wind power in the region is 30‑40 % cheaper than in Europe. The project also aims to create over 100 000 jobs and improve energy security, potentially lowering electricity bills for German consumers.