High electricity price despite expansion in renewables in Germany(sciencedirect.com)
sciencedirect.com
High electricity price despite expansion in renewables in Germany
https://www.sciencedirect.com/science/article/pii/S0301421524004683
2 comments
Portugal and Spain seem to have a iberic mechanism that honestly i don't know in detail, which prevented a sharp increase (at least as significant as european counterparts) after Ukraine war.
My guess is that renewable adoption is necessary to decrease energy prices, but is not enough, so good policy enters the chat.
My guess is that renewable adoption is necessary to decrease energy prices, but is not enough, so good policy enters the chat.
It seems the main finding is that if you roll out 91 TWh of nuclear in an implausibly straight line manner over the next 5 years, you get better price reductions than if you roll out 51 TWh of renewables but do it so the rollout starts slow and then ramps near the end of that time. (edit, their numbers are weird. If you scale them all up by the same factor it's 100 units of nuclear to 230 units of renewable which is somewhat more reasonable, but other criticisms remain)
Might have been more meaningful if they'd compared two equal cost or even just equal generation scenarios.
But they do seem to find that more renewables means lower prices, with that effect accelerating with deployment scale. Presumably an effect of the merit order pricing jumping whenever the marginal generator is gas and that happening less often as renewables take more of the grid.
They also note that gas was the price setter 92% of the time before.
My economics influenced view is that passing the high cost of gas through to electricity customers is good as it gives them a financial interest in switching the time they use electricity, efficiency and other good things, and encourages the grid to invest in renewables.
This seems massively unpopular with consumers but possibly just because it is in turn unpopular for politicians to pass the cost savings direct to consumers to spend as they please. They much prefer giving tax money to consumers only when they are forced to immediately give it to fossil fuel providers.
edit: I can't get their numbers to add up
> we assume an exponential growth of intermittent renewables to 51,000 MWh (i.e. 82%).
I'm assuming this is from 2022 levels, but those were:
> Overall, generation from renewable energies in 2022 was 233.9 TWh, around 8.5% more than in 2021 (215.5 TWh). At 100.5 TWh, onshore wind generation was about 12.4% higher than in 2021 (89.4 TWh). At 24.7 TWh, generation from offshore wind turbines was 2.9% above the previous year's figure of 24.0 TWh. 55.3 TWh were generated by Solar PV in 2022, 18.7% more than in 2021 (46.6 TWh).
So even assuming they meant 50,000 GWh i.e. 50 TWh that doesn't seem to add up. 2022 had a growth of 25 TWh in variable renewables.
And do they mean exponential from 0 growth in 2022?
Might have been more meaningful if they'd compared two equal cost or even just equal generation scenarios.
But they do seem to find that more renewables means lower prices, with that effect accelerating with deployment scale. Presumably an effect of the merit order pricing jumping whenever the marginal generator is gas and that happening less often as renewables take more of the grid.
They also note that gas was the price setter 92% of the time before.
My economics influenced view is that passing the high cost of gas through to electricity customers is good as it gives them a financial interest in switching the time they use electricity, efficiency and other good things, and encourages the grid to invest in renewables.
This seems massively unpopular with consumers but possibly just because it is in turn unpopular for politicians to pass the cost savings direct to consumers to spend as they please. They much prefer giving tax money to consumers only when they are forced to immediately give it to fossil fuel providers.
edit: I can't get their numbers to add up
> we assume an exponential growth of intermittent renewables to 51,000 MWh (i.e. 82%).
I'm assuming this is from 2022 levels, but those were:
> Overall, generation from renewable energies in 2022 was 233.9 TWh, around 8.5% more than in 2021 (215.5 TWh). At 100.5 TWh, onshore wind generation was about 12.4% higher than in 2021 (89.4 TWh). At 24.7 TWh, generation from offshore wind turbines was 2.9% above the previous year's figure of 24.0 TWh. 55.3 TWh were generated by Solar PV in 2022, 18.7% more than in 2021 (46.6 TWh).
So even assuming they meant 50,000 GWh i.e. 50 TWh that doesn't seem to add up. 2022 had a growth of 25 TWh in variable renewables.
And do they mean exponential from 0 growth in 2022?
https://news.ycombinator.com/item?id=43014254
It would seem to come down to policy more than generation price when comparing across countries, but by comparing over time you see little change attributable to renewables adoption.