Record solar output pushes average German peak price below baseload

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Renewables International

Solar Panel and High Voltage TowerIn April, power prices on the EEX electricity exchange continued to drop. Both baseload and peak prices fell below three cents, partly because last month was also a near record for solar power production.

Thanks to relatively good weather, power production from PV grew by more than 50 percent in April relative to March. The all-time record level was 5.1 TWh in July 2013, followed by 4.8 TWh in June 2014. Last month, 4.4 TWh was generated, putting April 2015 in third place historically.

In addition, a new record peak for PV production was posted between the 1 PM and 2 PM on April 21, when the old record of 24.2 GW from 6 June 2014 was topped considerably, with the new peak now at 25.8 GW.

 April also came in third for combined wind and solar power at 9.8 TWh, just behind March 2015 (so the previous month) at 10.27 TWh and January 2015 at 10.02 TWh.

The effect on prices was also noticeable. Because solar power is mainly generated around noon time, demand for peak power is offset at that time (there is a second remaining peak in the evening, which PV will never be able to offset directly). For the first time ever, baseload power was more expensive than peak power on average last month and day ahead trading at 2.97 cents per kilowatt-hour (baseload), compared to 2.94 cents (peak load).

Year over year, peak prices are down by 10.9 percent in Germany, which continues to have lower prices than neighboring countries on spot markets. Nonetheless, the other countries also posted falling prices last month, with baseload in France costing 3.95 cents, compared to 3.83 cents in Switzerland. Prices in those countries are otherwise relatively stable, however. The European average (ELIX) was 3.164 for baseload.

The news is potentially good for consumers, as the falling prices will eventual reach them. The prices are not, however, good news for power producers themselves, who increasingly struggle to break even. But a respite may be in sight: the nuclear phaseout will remove a huge chunk of baseload capacity by 2022, and the German government is also clamping down on coal power production, which may lead to the removal of numerous older coal plants.

Source: Renewables International. Reproduced with permission.  

  • john

    RE is not called Destructive Technology for nothing.
    The takeout from this is that zero cost of energy input will always win out in the long term.
    Ok this is only a short term effect however looking at the base price over a long term the message is that the downward price shift is very apparent.
    The more techno literate amongst the base load suppliers of power are shifting to having an energy mix of both old school and new kid on the block with inherent advantage to them.
    The result for Germany is a cheaper energy supply situation which can only help the country be very competitive in coming years and is a lesson for others to follow.

    • Elisabeth Meehan

      It’s called Disruptive, not destructive.

      Renewable energy does not destroy the old technologies – it just disrupts the old thinking that you can keep doing the same thing for-ever, and not adapt to change.

  • LuapLeiht1

    Great…so they have more PV capacity but are unable to satisfy peak periods while at the same time getting rid of their base power production (coal and nuclear). Since their natural gas comes from Russia, this push to PV will be both dangerous and amusing to watch in coming years.