The surge in electricity prices is over: Leipzig’s municipal utility is preparing the city for significantly lower profits

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Stadtwerke Leipzig had actually intended to generate a profit of almost 100 million euros in 2025. The target was 98.8 million euros. However, the final figure turned out to be lower: 93.5 million. In its annual report, Stadtwerke Leipzig did cite the higher costs (up by 9 million euros) as one explanation. However, the main reason for the lower profit was, above all, the significant decline in turnover from electricity trading. In fact, the profit forecasts for 2025 had been far too optimistic.

This was because the projections were based on the significantly higher electricity prices of 2024, which actually brought Stadtwerke Leipzig an annual surplus of 102 million euros in 2024.

The 2025 annual report now states that this was an unusual outlier, putting it as follows: “The level of other operating income last year was influenced by one-off factors and now reflects a normal level. The revenue, which is significantly lower than in the previous year, is primarily due to price-related developments in the wholesale and retail markets.”

When prices on the electricity market fall, revenue inevitably drops, and with it, profits.

Why is this important?

It serves as a warning sign that a city such as Leipzig cannot rely on its own energy company consistently generating ever-higher profits, which can then be used – amongst other things – to cross-subsidise public transport. According to a city council resolution, this amounts to no less than 95.6 million euros for 2026.

For 2026, the municipal utility company expects an even lower profit of 83.5 million euros.

Saying goodbye to the biomass power stations

However, the annual report also addresses two problem areas that caused quite a stir in 2025, as several environmental organisations finally called for the cessation of operations at the two biomass power stations in Piesteritz and Bischofferode. Both were actually designed to burn wood. Yet what looked to some people like an alternative form of renewable energy generation turned out to be a loss-making venture in the long term. “The biomass (cogeneration) power stations in Piesteritz and Bischofferode were taken out of service at the start of 2026 for economic reasons,” the report states.

That’s how vaguely one can put it when a brilliant idea turns out to be unsustainable. Especially not at a time when forests are ablaze. The two biomass power stations not only generated district heating but also electricity at the same time. And Stadtwerke Leipzig had actually planned to generate significantly more electricity in 2025 – following 961 gigawatt-hours in 2024, the figure was set to rise to an impressive 1,354 GWh.

However, this did not happen because the “unplanned unavailability of the Piesteritz and Bischofferode biomass combined heat and power plants” led to “reduced utilisation of the company’s own generation facilities”. To put it plainly: neither of these power stations generated district heating nor electricity. Although the amount of electricity generated did rise to 1.087 GWh, the other generation plants had to make up the shortfall.

Uncertainties that are almost impossible to predict

And the uncertainty does not end there. The annual report also addresses this. The forecasts made are subject to significant uncertainties – for example, regarding the development of raw material prices, such as for natural gas or LNG. The conflict in the Middle East triggered by Donald Trump is causing a high degree of uncertainty for the 2026 financial year.

At the same time, however, the municipal utilities are reaching a limit, as the increased energy prices can no longer be easily passed on to customers in Leipzig. The report describes the problem as follows: “In the retail sector, the manufacturing industry and the hospitality sector, it remains difficult to pass on the increased producer prices. There is a risk that customers may, under certain circumstances, fail to meet their contractual payment obligations or fail to do so on time.”

In this respect, Leipzig’s businesses are in much the same position as many low-income households in the city.

Moving away from climate-damaging fuels

Stadtwerke Leipzig, too, can only break free from its extreme dependence on the highly volatile prices of fossil fuels by further diversifying its energy generation. And that is precisely what they are doing by building wind turbines and solar power plants. They also invested heavily in 2025: 131.8 million euros. This, in turn, further increased the value of their own assets – from 935 million euros to almost 985 million euros.

But the report does not shy away from issuing warnings. This is because the federal government’s energy policy, which has become increasingly erratic, is posing problems for all municipal utilities when it comes to their long-term planning. The bare figures show that everyone must work towards transforming their energy generation to achieve climate-neutral energy production. The U-turns at federal level and the resulting changes to the legal framework are creating, as the report puts it, “operational risks”.