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Germany's Glut of Electricity Causing Prices To Plummet
WIth an interesting followup to the recent news that Germany's power production by at least some measures was briefly dominated by solar production, AmiMoJo (196126) writes Germany is headed for its biggest electricity glut since 2011 as new coal-fired plants start and generation of wind and solar energy increases, weighing on power prices that have already dropped for three years. From December capacity will be at 117% of peak demand. The benchmark German electricity contract has slumped 36% since the end of 2010. "The new plants will run at current prices, but they won't cover their costs" said Ricardo Klimaschka, a power trader at Energieunion GmbH. Lower prices "leave a trail of blood in our balance sheet" according to Bernhard Guenther, CFO at RWE, Germany's biggest power producer. Wind and solar's share of installed German power capacity will rise to 42% by next year from 30% in 2010. The share of hard coal and lignite plant capacity will drop to 28% from 32%.
This just illustrates that carbon tax is too low
As long as the government can feel good about itself, why should they care if you can barely afford food?
Wrong. The price at the EEX is 4 cent per kWh. That's what RWE buys energy for. Nuclear energy is only competitive due to high subsidies and no tax on nuclear fuels. Which is a subsidy, too. Remove all nuclear subsidies, demand the money back, tax them properly and all of the sudden nuclear energy is the most expensive one. That's the big lie of the big four energy company. Renewable energy is not expensive.
I've heard that one before. In europe, we've got our share of "temporary bridges" built after "world war II" that were definitely going to be replaced in a few years by a definitive solution and they were still used in the 21st century. We also have temporary taxes (every new tax for decades has always been introduced as temporary) that were never repelled. And now, we have temporary coal power.... I'll believe it when I see it.
Hasn't been seen so far. Germany is building new coal and has taken many older plants out of mothballed status since Fukushima and planned closure of the nuclear power plants.
Perhaps in very distant future, they will start reducing the dependence on coal. Right now, German coal buildup is a massive manna from heaven for power plant building companies in what is otherwise a very challenging market outside China.
That is an apt summary of Energiewende. It's a "feel good" policy that came after Fukushima, and resulted in a massive build up of coal and gas plants under the guise of "get renewables".
And now you pay so much for electricity, that you actually have energy poverty in Germany - state where there are people who are too poor to afford electricity. In a modern Western country. It's a god damn insanity, but Greens get to feel good about being on the forefront of renewables. Poor be damned, as usual
I think this is exactly the right diagnosis of the Energiewende. Basically, it's a loss in every way: Emissions are worse, prices are higher, more coal is being burned than ever before. But yes, there is a fairly large group of wealthy people on the political left get a warm feeling about it, because when they were teenagers, they had a great time protesting against nuclear power. Now that they're influential and wealthy voters, they finally get to have the thing they wanted when they were teenagers: a Porsche, and a shutdown of nuclear powerplants.
Wholesale price is down because utilities are FORCED to accept electricity from renewable plants, which were massively built up due to subsidies.
Said subsidies are paid by a massive surcharge taken out of the bill of consumers.
As a result, while electricity wholesale prices are down, the reason they are down is because consumers are being charged an arm and a leg, and that money subsidises production.
And the trend is to increase the surcharge, because Energiewende is at massive risk of failing due to being late or deemed unfeasible on almost every front.