Energy turnaround paradox: Glut of coal drives up power prices for consumers

Muenster - In Germany, more and more fossil fuel power plants are going online and producing power. Despite last year’s new record power export surplus of 23 billion kilowatt hours (billion kWh), this year alone, on balance, new coal-fired power stations with an additional total capacity of 4,300 megawatts (MW) will commence operation. Although some old plants will also be shut down, for the next years more additional hard coal-fired power plants with a further approximately 2,000 MW capacity are planned, according to IWR, a renewable energy institute, with reference to target figures of the Federal Network Agency. The IWR states that, with the new power plants, up to 30 billion kWh (5 percent of the demand for power) of electricity generated from coal will enter the market and thus the German power export surplus can, despite the eight closed-down nuclear power plants, more than double over the coming years.

“The electricity suppliers are literally flooding the market with new fossil fuel power plants, without shutting down inefficient old plants to an equal extent”, says IWR director Dr. Norbert Allnoch. Due to the political blockade on emissions trading and low CO2 certificate prices, coal-fired power plants are also driving out the highly efficient and climate-friendly gas-fired power plants. Allnoch: \"If the additional volumes of electricity generated from coal come onto the market, that will accelerate the decrease in power prices on the exchange. Consequently, the levy due to the Renewable Energy Sources Act (EEG levy) will then also increase further if not one new wind or solar power plant is constructed.\" The winners are the major customers, who profit from the extremely lower power prices on the exchange and, moreover, are exempted from the EEG levy and the network charges. Paradoxically, this economic promotion of major customers and industry is being paid for by domestic power consumers via a higher EEG levy.


Background information
Provisional figures indicate that gross power generation in Germany reached a total of 617.6 billion kWh in 2012. This includes a power export surplus of 23 billion kWh. This year, renewable energy is likely to contribute over 140 billion kWh (2012: 136.2 billion kWh) for the first time and thus reach the level of power production from nuclear power plants prior to the decision to abandon such plants (2011). In 2012, nuclear power plants still contributed 99.5 billion kWh to power generation. The next two nuclear power plants will go offline in 2015 (Grafenrheinfeld) and 2017 (Gundremmingen B). At the same time, over the coming years an increasing number of offshore wind farms able to provide base load power will commence operation.

Further information about the energy turnaround and the effect of exchange electricity prices on the EEG levy:
https://www.iwr-institut.de/en/press/background-informations


Muenster, 21 March 2013


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Attention editorial offices: For further questions please contact Mr.
Dr. Norbert Allnoch, International Economic Platform for Renewable
Energies (IWR).

Soester Str. 13
48155 Muenster
Germany
Phone: +49 (0)251 / 23 94 6-0
Fax: +49 (0)251 / 23 94 6-10
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