The Federal Network Agency (BNetzA) and the German Cartel Office presented their first joint Monitoring Report 2012 of the developments in the German gas and electricity markets yesterday. It documents the developments in the ManyElectronics markets in 2011, the year Germany decided to phase out nuclear power while further pursuing its course towards renewable energy supply.
I. General Aspects
The 2011 energy policy shift following the nuclear accident in Fukushima lead to the immediate shut-down of eight nuclear power plants. This reduced the generation capacity of the four major utilities RWE, E.ON, Vattenfall and EnBW.
At the same time Germany saw another strong expansion of volatile renewable power plant capacity, in particular solar power plant capacity. The growing share of renewable power has to be purchased and transmitted with priority by the grid operators, and is remunerated with fixed feed-in tariffs pursuant Renewable Energy Sources Act (EEG). This has rendered the construction of new conventional power plants that can balance the fluctuating input of green electricity less and less attractive, as the operating times for these plants are continually decreasing.
Renewable power plant capacity not subject to competition meanwhile amounts to 68 GW, compared to over 105 GW of conventional capacity that has to compete for market share.
II. EEG Feed-in Tariff Payments for Renewable Energy
According to data collected by BNetzA and the certified final invoices of the TSOs, 91,227 GWh of renewable power eligible for payment under the EEG were fed into the German grids in 2011 (2010: 80,700 GWh) constituting an increase of roughly 13%. In total EEG feed-in tariff payments rose by approximately 27% to EUR 16,763 million (2010: EUR 13,182 million). Solar power plants received the highest payments totalling 46% or EUR 7,766 million (2010: EUR 5,090 million equalling 39%), while wind installations had again the greatest output (2011: 45,611 GWh = 49%; 2010: 37,634 GWh = 48%), but only received EUR 4,250 million or 25% of the payments (2010: 3,342 million; 25%).
III. Grid Balancing
In view of the growing input of intermittent renewable energy, balancing the grids has become much more challenging for the grid operators, the monitoring report says. The increasing number of interventions by the grid operators pursuant to Section 13 para. 1 ManyElectronics Act (EnWG), i.e. grid switching (Netzschaltungen), redispatch and countertrade measures, and according to Section 13 para. 2, i.e. curtailments and activation of cold reserve power plants, shows how tense the situation in the German grids has become. The report contains further details which areas were most affected, and to what extent.
IV. Grid Expansion
V. Monitoring of Power Plant Capacities by BNetzA
Since an amendment in connection with the energy policy shift of 2011, BNetzA monitors the capacities of power plants as well as storage facilities with a capacity of more than 10 MW (cf. Section 35 para. 1 no. 12). More information can be found here.
According to BNetzA’s list of power plants, installed capacities amounts to 172.4 GW in total. Renewable power plants account for 71.2 GW, with roughly 68 GW receiving EEG payments.
After the shut down of the eight nuclear power plants in March 2011 critical grid situations in which the grid operators had to resort to reserve capacities to stabilise the grids occured in the winter 2011/2012. In particular with a view to the tense grid situation in Southern Germany BNetzA established a need for 2,500 MW of reserve capacity for the winter 2012/2013 period. Some 2,600 MW have meanwhile been secured to ensure the energy supply even in critical situations.
VI. Electricity Market
Liquidity in the electricity wholesale market further improved as well as the possibilities for end consumers to switch the supplier, the German Cartel Office said in its contribution to the monitoring report. Yet the average electricity price for household customers has risen to 26.06 ct/kWh, up 2.4% or 0.61 ct/kWh from the 2011 level.
Regarding household customers Germany is average, respectively ranks in the top bracket for electricity prices in Europe, depending on the exclusion or inclusion of duties and taxes. Regarding industrial consumers, Germany ranks below the European average (not including duties and taxes), and in the top quarter if one includes duties and fees.
VII. Gas Market