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Germany's Glut of Electricity Causing Prices To Plummet 365

Posted by timothy from the these-low-low-prices-come-with-a-trail-of-blood dept.
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%.
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Germany's Glut of Electricity Causing Prices To Plummet More

Germany's Glut of Electricity Causing Prices To Plummet

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  • This just illustrates (Score:2, Insightful)

    by Chrisq ( 894406 )
    This just illustrates that carbon tax is too low

    • Re: (Score:3, Interesting)

      by Mashiki ( 184564 )

      This just illustrates that carbon tax is too low

      Ah, looks like we've run into another person who believes that human misery is the way to go. How's the plan for excessively high energy prices working out for various countries anyway? And do you believe that you can build a world on expensive energy, expensive food, and expensive bare necessities without causing massive suffering to people.

      • Re:This just illustrates (Score:5, Insightful)

        by drinkypoo ( 153816 ) <drink@hyperlogos.org> on Saturday June 28, 2014 @08:10AM (#47340043) Homepage Journal

        Ah, looks like we've run into another person who believes that human misery is the way to go.

        Let me guess, you typed that while staring into a reflective, black screen. Permitting unchecked emissions of CO2 is what's going to cause us the real human misery. Keep telling yourself you can shit where you eat without getting sick, though, while desperately looking around for supporting examples.

        • Re:This just illustrates (Score:5, Insightful)

          by Mashiki ( 184564 ) <mashiki@NoSPam.gmail.com> on Saturday June 28, 2014 @09:18AM (#47340293) Homepage

          Let me guess, you typed that while staring into a reflective, black screen. Permitting unchecked emissions of CO2 is what's going to cause us the real human misery. Keep telling yourself you can shit where you eat without getting sick, though, while desperately looking around for supporting examples.

          So you're telling me that CO2 is what's going to cause the real human misery. Not poor healthcare, not food to eat, not ways to keep things from spoiling. Not having properly developed agriculture or sewage management. Okay there. Next you'll be saying that burning cow dung indoors doesn't cause lung cancer, and sleeping on the ground in a hut covered with shit doesn't cut your life expectancy in half due to parasites. You do realize that in my examples that not even 1/3 of the people on this rock are at this level. If you're lucky you might hit 20%

          • Re:This just illustrates (Score:4, Insightful)

            by MrKaos ( 858439 ) on Saturday June 28, 2014 @10:50PM (#47343233) Journal

            Let me guess, you typed that while staring into a reflective, black screen. Permitting unchecked emissions of CO2 is what's going to cause us the real human misery. Keep telling yourself you can shit where you eat without getting sick, though, while desperately looking around for supporting examples.

            So you're telling me that CO2 is what's going to cause the real human misery. Not poor healthcare, not food to eat, not ways to keep things from spoiling. Not having properly developed agriculture or sewage management. Okay there. Next you'll be saying that burning cow dung indoors doesn't cause lung cancer, and sleeping on the ground in a hut covered with shit doesn't cut your life expectancy in half due to parasites. You do realize that in my examples that not even 1/3 of the people on this rock are at this level. If you're lucky you might hit 20%

            Except that these are the very people that be affected by the consequences of CO2 emmissions.

    • what it means is we need better ways to spread resources. If Germany could export that power to places that have a lack of power generation capabiity, that would be ideal, no? Same applies for crop surpluses, etc.

      We need a better global infrastructure not more taxes that, like all taxes, will not benefit who they are supposed to.

  • Another misconception bites the dust (Score:5, Informative)

    by AmiMoJo ( 196126 ) * on Saturday June 28, 2014 @04:51AM (#47339455) Homepage Journal

    People here keep saying that Germany is adding coal capacity to make up for the closure of nuclear plants, but actually they are reducing it over time. Yeah, in the short term there are more plants, but that is just so they can get running before taking the old ones off line. After that the total capacity will be lower.

    • Re: (Score:2, Informative)

      by Anonymous Coward

      Except that Germany mostly uses brown coal in it's coal plants which pollutes the environment the most. It's the dirtiest form of energy production. Lot's of CO2 and Sulphur products.

      • Re:Another misconception bites the dust (Score:4, Informative)

        by K. S. Kyosuke ( 729550 ) on Saturday June 28, 2014 @05:48AM (#47339605)
        Except the sulphur (and fly ash) gets scrubbed. I believe that may even be a legal requirement in Germany.

        • Some of it may be scrubbed, but there are still significant losses. Even a small fraction of a percent escaping results in substantial pollution when burning billions of tons of coal a year. Have a look at the contents [energyfromthorium.com], and that isn't even considering the contribution of CO2 to ocean acidification [wikipedia.org].

          Germany should reverse course, as they are not on a path which will eliminate or even mitigate coal pollution. Current policy is driving prices up and creating a permanent dependence on fossil fuels to compensa

      • Re: (Score:2, Informative)

        by Andreas Mayer ( 1486091 )

        Except that Germany mostly uses brown coal in it's coal plants which pollutes the environment the most. It's the dirtiest form of energy production. Lot's of CO2 and Sulphur products.

        Plants in Germany are filtered. I don't know of any problems with sulfur. In fact, sulfur in the air is a lot less than in the 1980s.
        (According to Wikipedia, modern plants filter out 99.5% of ash and 90% of sulfur dioxide.)

        Though you are correct in that they produce more CO2. (Wikipedia says typically 850–1200 g CO2 per kWh compared to 750–1100 g CO2 per kWh for black coal.)

        Obviously we need to move away from fossil fuels. Hence wind and solar.

        • Re:Another misconception bites the dust (Score:5, Informative)

          by Rei ( 128717 ) on Saturday June 28, 2014 @08:59AM (#47340219) Homepage

          But of course, that difference is way outweighed by the fact that the new gassification plants are about 40% efficient, versus 25%-ish for the plants they're replacing. Also the new plants are designed for rapid ramp up/ramp down. That means that while they're baseload for now, the more renewables in the future come to dominate the grid, the more they'll switch over to being peaking plants. I actually don't think it's a bad strategy at all. I think it makes a lot more sense than relying on Russian NG. It's lower carbon, but more expensive, and it leaves you reliant on a country that tries to use its market dominance as geopolitical blackmail. And the extra money you spend on NG could instead be spent on increasing your renewables deployment.

          On the other hand, if some of the European nations that are interested in fracking end up going that route, perhaps they get low carbon *plus* low cost and geopolitical stability. It's really hard to know what NG prices are going to be in the EU in the long term. If EU does go the fracking route, Russia's going to be in a world of hurt. Before the US fracking boom, US and EU NG prices were about the same. Since then, EU prices have doubled while US prices have halved; US prices are now a quarter of what they pay in Germany. If the EU could get gas prices even close to what they are in the US, the Russian natural gas industry will pretty much collapse, there's no way they can afford that sort of pricing.

    • Re:Another misconception bites the dust (Score:4, Interesting)

      by Trepidity ( 597 ) <delirium-slashdot AT hackish DOT org> on Saturday June 28, 2014 @05:46AM (#47339599)

      In what year is it predicted that Germany will generate fewer kWh of power from coal than it did in, say, 2005? Will we have to wait until 2050 or something for this long-promised decrease?

      • Re:Another misconception bites the dust (Score:5, Informative)

        by Savage-Rabbit ( 308260 ) on Saturday June 28, 2014 @06:50AM (#47339767)

        In what year is it predicted that Germany will generate fewer kWh of power from coal than it did in, say, 2005? Will we have to wait until 2050 or something for this long-promised decrease?

        I don't think anybody can give you am exact date on when coal power will be phased out but the energy transition effort enjoys fairly broad support among the German public even if it is expensive so I expect it will continue. Also, there is now a strategic security/economical/political dimension to the energy transition for Germany much like there is for the USA concerning Oil independence that has only been reinforced by the Ukraine crisis. The Germans also tend to think in terms of decades rather than fiscal quarters like many Americans seem to do. Germany has gone from renewables being 6.3 percent of the national total in 2000 to about 25 percent in the first half of 2012. That's an increase of about 20% in 12 years so if we are insanely optimistic and assume a linear progression they should be at 50% renewables in c.a. 2028-30. The future of the energy transition project depends on several factors (apart from politics and economic issues of course), chief among them are things like the speed and extent of the transition to electric vehicles and hydrogen fuel cell vehicles, how the transition to wind and solar goes and perhaps most importantly the level of progress on projects to store excess energy. The last time I checked the Germans were planning to store energy initially by producing hydrogen which will be used to supplement natural gas (which in turn requires modifications to the gas mains) and how much success they have with projects to store energy by producing methane from carbon dioxide (which a Nature article I read claimed they plan to eventually scrub from the atmosphere) and the hydrogen generated with excess solar/wind energy (see http://en.wikipedia.org/wiki/P... [wikipedia.org]). I seem to remember there are already a couple or so industrial scale P2G methane plants on line but they are still somewhat experimental.

        • Also, there is now a strategic security/economical/political dimension to the energy transition for Germany much like there is for the USA concerning Oil independence that has only been reinforced by the Ukraine crisis.

          Two things:

          1) The USA is a net exporter of petroleum products (we import some oil, but export more refined petroleum products than the oil we import makes) these days.

          2) Increasing dependence on natural gas rather than coal by Germany makes them more vulnerable to things like the Ukraine

        • Re:Another misconception bites the dust (Score:5, Informative)

          by Rei ( 128717 ) on Saturday June 28, 2014 @09:25AM (#47340331) Homepage

          Hydrogen doesn't just require "modifications to the gas mains", it requires a complete reconstruction, and it'd probably be a really dumb idea. Hydrogen embrittles metals. You put it in any sort of regular pipe, and your system will start springing leaks everywhere from distribution to end-user consumption. It also leaks through almost everything, but especially things not specifically designed for it. But it gets worse, because after it leaks it tends to pool in explosive mixtures under overhangs. Also, if you have multiple pipes running parallel, and there's hydrogen in the lower one but not in the upper one, part of the hydrogen leaking out of the lower pipe ends up in the upper pipe, where it can follow it to its destination and pools there. Beyond that, H2 has combustible fuel air mixtures way, way wider than of methane, 4-75% in air. And unlike methane, it can readily undergo deflagration-to-detonation transitions under STP conditions. NASA safety guidelines require any facility handling more than a dozen or so kilograms of hydrogen to have a roof designed to be blown away in an explosion. And hydrogen ignites with a tenth the ignition energy of methane. We're used to fuels that require a visible, audible spark to ignite, but hydrogen ignites with the sort of tiny static or electrics discharges that you don't even see in everyday life; ordinary electronics are not designed to be safe in an environment where a combustible hydrogen mix might leak into.

          Beyond that, producing hydrogen then burning it is a ridiculously wasteful approach. Even using it in a SOFC after producing it is still ridiculously wasteful. And it's also a very expensive process. Producing methane from atmospheric CO2, however, is so bad it makes even hydrogen look efficient by comparison.

          Obviously, the efficient way to store electricity is batteries. Given DC and not too fast of a charge rate, li-ions, for example, can be over 99% efficient. But obviously the price for storage would be way too high. There's various cheaper techs on the market, including some forms of flow storage, with radically cheaper ones in development, and there's talk of using used EV batteries for grid storage; we'll have to wait and see how that plays out. Also far cheaper and more efficient (~75% net) than hydrogen production is pumped hydro, with or without a river present. Compressed air storage is relatively cheap, but inefficient (~10-30%); however there's some lab-scale attempts at isothermal storage which might get that signficantly higher.

          Sometimes you see claims on hydrogen or compressed air production that are higher efficiency, but that's just PR flak; they get those numbers by assuming you make use of the waste heat for some other industry that would otherwise have to burning something to produce said head. But you can say that about every system on earth, because everything has waste heat. The number that matters is how efficiently you can store your electricity.

      • Re: (Score:2)

        by AmiMoJo ( 196126 ) *

        Around 2020.

      • You will have to wait until the current generation of politicians has retired. Then a new generation of politicians will be in power who will make new impossible promises that they will then not fulfill until they retire.

      • Coal usage will drop as soon as the political winds shift yet again and a new generation of politicians reopens the nuclear plants.

    • Re: (Score:2, Insightful)

      by Anonymous Coward

      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.

    • Re:Another misconception bites the dust (Score:4, Insightful)

      by Luckyo ( 1726890 ) on Saturday June 28, 2014 @06:56AM (#47339785)

      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.

  • WTF? (Score:5, Informative)

    by Anonymous Coward on Saturday June 28, 2014 @05:04AM (#47339481)

    Lower prices???? In what world?
    The prices per kW/h have risen year after year in Germany. How do I know this? I'm living in fucking Germany and get a higher bill each and every year.
    RWE is one of the greediest bitches in Germany. They even have the audacity to ask the government to pay for the save destruction of their own nuclear plants, after receiving subsidies to operate them and extracting as much money as possible for their own pockets.

    • Lower prices???? In what world?

      I think they're talking about the prices they can charge other utility companies. Consumer prices will continue to rise, because corporate greed will never decline.

      • Re: (Score:3, Informative)

        by Luckyo ( 1726890 )

        Actually the prices are rising because government has made some pretty insane requirements of those companies. They are basically building a completely new power grid in the country which is costing them billions upon billions, on top of building up renewables and coal and gas needed to provide hot reserve for the renewables.

        They certainly are posting good profits on all of this, but they're not in a good spot right now with massive investments they have to make and all the subsidy mess that is going on wit

    • The prices per kW/h have risen year after year in Germany.

      kWh, dammit. Go learn some very basic physics, or you won't even understand what you are being billed for.

    • Re: (Score:3, Informative)

      by brambus ( 3457531 )
      I'm afraid it's a bit more complicated than that. The EEG is currently running a dangerous experiment with a highly questionable outcome with the German electricity grid and economy. The EEG guarantees renewables a feed in tariff for the next 20 years to make them appear to be ultimately profitable and forces grid operators to take the electricity regardless of the spot price on the market. Grid operators must then direct traditional plant operators to either throttle or even shut down to keep the grid stab
      • So have the plant operators put the extra energy in some batteries and stop crying about it already. In a 100% renewable system, you're going to need battery/fuel capacity for when the sun is down and when the wind doesn't blow. Store the energy when it's cheap and plentiful, don't run your plant full throttle, and move staff over to monitor energy storage. If there is really such a surplus, make hydrogen, get in bed with VW for a fuel cell vehicle, do something. I really can't believe that the best the
    • Sadly other places have the same rises and some surpass Germany. It's as if Enron wrote the Standard Operating Procedures for "electricity traders" worldwide and now pointless middlemen infest most electricity industries.
      It sucks immensely.
      For example, Australia has much lower wholesale electricity prices than Germany yet has much higher retail prices than Germany with the distributors blaming their con on increased infrastructure. That price gouging has driven residential solar to around a two year payba

  • So not a total ripoff anymore? (Score:5, Informative)

    by Skylinux ( 942824 ) on Saturday June 28, 2014 @05:09AM (#47339487) Homepage

    So instead of extremely high prices we are going to get high prices? Awesome!

    http://de.wikipedia.org/wiki/S... [wikipedia.org]
    Lists an average price of 26,4 ct/kWh for 2012 in Germany. RWE.de gives me a current price quote of 25,72 ct/kWh.
    The average in Europe is 18,4 ct/kWh.

    Power may be cheaper on the exchange but the consumer is still getting shafted.
    The only people who will profit from this are energy traders and power hungry corporations. They currently pay ~15 to ~12 ct/kWh.

    • Re: (Score:2)

      by Trepidity ( 597 )

      The average in Europe is that low mostly because of some Eastern European countries with big old Soviet power plants that sell power cheaply. The average would be considerably higher than 18,4 ct/kWh if you removed Bulgaria, Hungary, Romania, and the Baltic countries from the calculation.

    • Re: (Score:2)

      by GNious ( 953874 )

      Just looked up the prices back home (Denmark):
        0.274 - 0.35 EUR/kWh

      Not sure Germans have anything to complain about :)

  • Increased production, or reduced demand? (Score:4, Informative)

    by LordLucless ( 582312 ) on Saturday June 28, 2014 @05:16AM (#47339501)

    The production figures in this article are all given as percentages of demand - not the actual amount generated. There's two reasons Germany could suddenly be producing an excess of energy: supply has increased, or demand has dropped. A quick Google shows German production has dropped 6% in the period 2004-12 ( http://en.wikipedia.org/wiki/E... [wikipedia.org] ).

    So the reason isn't that Germany's renewable plants are producing an abundance of power - it's that people are demanding less power; presumably because they cannot afford prices that are among the most expensive in the world ( http://www.contactenergy.co.nz... [contactenergy.co.nz] )

  • Higher prices for me... (Score:3, Informative)

    by Anonymous Coward on Saturday June 28, 2014 @05:23AM (#47339523)

    Funny, I just got a letter stating my (Baden-Wurttemberg, Germany) energy prices will rise on August 1st to 27.42 cents per kWh. That translats to 37.43 US cents per kWh. This price will remain in effect until December 2015. Nice.

  • some don't agree with that (Score:3, Informative)

    by wm2810 ( 742833 ) on Saturday June 28, 2014 @06:02AM (#47339637)

    http://srsroccoreport.com/germ... [srsroccoreport.com] :
    Since the introduction of the Renewable Energy law in 2000 aimed at replacing coal and gas-fired as well as nuclear power generation by so-called renewable energy sources, the household price for electricity has jumped by more than 200%. German customers now pay the second-highest electricity prices in Europe. At the same time, the task of stabilizing the grid against the massive erratic influx from solar and wind power plants that produce without regard for actual need has pushed the operators to their limits.

    One of the major problems with wind and solar is that the projects aren't commercially viable without huge Govt subsidies including long-term contracts by energy utilities to pay 2-4 times the going wholesale electric rate for solar and wind generated power.

  • Comment removed based on user account deletion

  • Prices ridiculously low (Score:3)

    by excelsior_gr ( 969383 ) on Saturday June 28, 2014 @06:21AM (#47339697)

    Chemical engineer here. The industry prices for electricity have become so low that it doesn't even make sense to heat up the reactors using turbine-generated steam any more. It's ridiculous. It's cheaper to buy the electricity to generate the steam!

  • These markets are being screwed up by politics... both international and domestic.

    If we self generate then the powers that be can sit on it and spin... I really can't wait.

  • "From December capacity will be at 117% of peak demand."

    Ignoring, of course, that when talking about solar/wind power and "capacity," the actual output is, to say the least, variable.

    They had the big headline recently about how much they generated during one hour of one day - but for some reason, they didn't mention all of those cloudy and windless winter days where effective output was a tiny fraction of that - and they had to use lots and lots of coal to make up the difference.

  • Sunny days they make tons of "free" electricity.

    On cold dark winter nights, where does the power come from?

    They can build backup plants that run on coal/gas typically operating under nameplate capacity or they can buy nuke power from the French.

    Oh, the irony...

    • Re: (Score:3)

      by d3vi1 ( 710592 )

      Sunny days they make tons of "free" electricity.

      On cold dark winter nights, where does the power come from?

      They can build backup plants that run on coal/gas typically operating under nameplate capacity or they can buy nuke power from the French.

      Oh, the irony...

      You've got it. What I don't understand is why nuclear electricity is put in the same basket as coal and gas plants. The incidents that Nuclear has gone through in the past 60 years only reinforce my view that it's a safe solution. If given all the fsck-ups that gave us Chernobyl, Fukushima and 3 Mile Island that's all that happened I think that it's pretty much OK. I'm saying this because coal/thermal have their exhaust pipe problems which affect a much greater percent of the population and hydro is in gene

      • Re: (Score:3)

        by MrKaos ( 858439 )

        You've got it. What I don't understand is why nuclear electricity is put in the same basket as coal and gas plants.

        Because nuclear industry externalities are less immediate and more severe than coal and gas.

        The incidents that Nuclear has gone through in the past 60 years only reinforce my view that it's a safe solution.

        I'd suggest that much of the information about what has gone on in the nuclear industry has been subjected to PR spin and political interference to minimize the true situation. One only has

  • A province that, because it has little storage capability, has a rigid hydro system geared to meet peak demand and 'dump' power during low demand periods. It's a province that has paid others to take its surplus power.

    A solution to both Germany's and Ontario's problem is creating storage capability, and that needs innovative research world-wide. Sadly, the focus is mostly on new ways to _produce_ power. Go figure.

  • Germany like Ontario (to a much lesser extent) invested in wind farms and solar.
    In Ontario, all wind farms have to be installed with back-up generators, gas-turbines for the most part.
    Why?
    On hot, windless days of summer, when demand peaks for air conditioning, the back-ups kick-in for the useless wind turbines.
    In winter, when the skies are mostly grey, the solar is mostly useless to meet the demand peak caused by electric heating. When the wind does blow in winter, the speeds are usually above the wind tur

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