7 ms·

French generation is ~70% nuclear (10% wind/solar) and German is ~10% (~40% wind/solar). Yet their prices track each other closely. So I think this explanation

French generation is ~70% nuclear (10% wind/solar) and German is ~10% (~40% wind/solar). Yet their prices track each other closely. So I think this explanation is too simplistic. Possibly there are large interconnects between the French and German grids levelling out wholesale prices, but my assumption is that they cannot carry enough power for this imagined scenario where nuclear makes a big difference.

throwaway894345 5y ago
Do these countries trade energy in the same markets? If so, that would explain it, wouldn’t it?
- dan-robertson 5y ago
  That’s the question I ask in the second paragraph. It only explains it if the interchange is sufficiently large. Another explanation could be that there is some EU mechanism to charge the same wholesale price even if there is not sufficient interchange capacity.
kindle-dev 5y ago
France is the the largest nuclear energy exporter, but it only exports about 12% of its nuclear energy, which might be enough to move the domestic price.
- AnthonyMouse 5y ago
  If that 12% is the annual average, also keep in mind that it's presumably ~25% sometimes and ~0% at other times. Now suppose the domestic production is 100 GW, the domestic consumption is 90 GW and you're not exporting anything. Compare this to when the domestic production and consumption are still the same but you're exporting 20 GW. You go from having 10 GW to spare to being 10 GW short and having to bid for it against the foreign market. And the prices aren't linear. In oversupply you could be paying barely anything. At 10% undersupply you could be paying twenty times as much if that's how much it takes to reduce demand by 10%.
refurb 5y ago
If you have interconnects, energy is fungible - just like oil or other commodities.
- Retric 5y ago
  Electricity is only fungible on a second by second basis while ignoring transmission losses. Local power production has a significant advantage. This gets offset when distant locations have significant geographic advantages like hydroelectric power or wind etc, or when peak production or demand varies between locations.
gumby 5y ago
Actually it appears that this is how it works, though in this case it’s more purchases from Czech than France.
shakow 5y ago
> but my assumption is that they cannot carry enough power Right now (https://www.electricitymap.org/zone/DE https://www.electricitymap.org/zone/DE), Germany is importing from France alone the equivalent of a bit under two French nuclear power plants at full power.
- fundatus 5y ago
  Might be, but in total Germany is a net exporter of electricity.
  - shakow 5y ago
    1. That's not the point, the point being to illustrate how interconnected the EU grid is. 2. Regarding your comment, I personally don't see Germany importing 72 gCO2/MW power to export 399 gCO2/MW power as a good thing for anyone but coal companies, but whatever floats your boat.
    - KingOfCoders 5y ago
      "the point being to illustrate how interconnected the EU grid is." Which is a good thing. Very few countries are self sufficient regarding cars for example, or Kiwis. So humanity invented trading and people trade things they don't have for things they have - so good interconnection is a good thing.
      - shakow 5y ago
        > Which is a good thing Absolutely.
  - cbmuser 5y ago
    That’s irrelevant since Germany is often exporting electricity at cheap or even negative prices. The net value also doesn’t buy you anything if you have to import electricity due to lack of local production. France can self-supply itself with electricity.
PeterisP 5y ago
There's no "French and German grids", most of EU is a single grid (see map https://en.wikipedia.org/wiki/Synchronous_grid_of_Continental_Europe#/media/File:Wide_area_synchronous_grid_(Eurasia,_Mediterranean).png https://en.wikipedia.org/wiki/Synchronous_grid_of_Continenta...) and there's no meaningful difference between "interconnects" linking France and Germany and power lines within France, though there are a bit fewer of them than internal lines. There are some limited interconnects linking continental EU with UK and Scandinavia with some trade happening over them.
- Symbiote 5y ago
  Or see https://www.entsoe.eu/data/map/ https://www.entsoe.eu/data/map/ for a map of the transmissions lines.
- jacquesm 5y ago
  That may be so but there is a tremendous difference in quality and capacity to absorb fluctuations between the various interconnected national grids. At the physical level they are still very much separate.
- Retric 5y ago
  Calling it one grid is kind of misleading. There is nowhere near enough transmission if all power production in say Spain failed even if in theory there is enough excess capacity across the EU to provide power to Spain. Limits on transmission result in individual countries generally having significantly different wholesale prices.
  - Symbiote 5y ago
    Isn't that the case with a grid of any size? The British grid has a North - South imbalance, if I understand that correctly 20% of power would be lost with a 1500km transmission distance. Replacing all the power of Spain would be very inefficient, even if the connections did exist. https://en.wikipedia.org/wiki/National_Grid_(Great_Britain) https://en.wikipedia.org/wiki/National_Grid_(Great_Britain) (Power Flow section)
in3d 5y ago
It will go down to 0% in Germany in several months. Germany is shutting down its last six nuclear power plants and no new ones can be built. Italy, Switzerland and Belgium also want to shut down their nuclear power plants. Shameful, unscientific public opinion in Western Europe despite more people realizing the danger of global warming.
- betaby 5y ago
  There are no nuclear plants in Italy producing commercially available electricity AFAIK.
  - danmaz74 5y ago
    A referendum after Chernobyl forced the Italian government to shut down all nuclear power plants in Italy before the 90s
- ddalex 5y ago
  Eastern will happily pick up the slack on new nuclear power plants and sell that electricity to balance the trade.
  - rini17 5y ago
    Both Czechs and Slovaks are building new nuclear blocks (Temelin and Mochovce) but the progress is slow and riddled by corruption. So it's doubtful they will come online soon.
- neuronic 5y ago
  The mistakes were made 30 years ago and once more after Fukushima. Germany should have gotten off coal first, then nuclear. Or it should have built modern reactors 20 years ago. Now it's too late, too long and too expensive.
- hiram112 5y ago
  While I understand the fear of nuclear, especially in Europe where Chernobyl took place, I find it kind of silly that countries like Germany, Switzerland, Italy, Belgium, etc are shutting down THEIR nukes, while bordering France (and other countries) who aren't shutting them down. Do they imagine that the radiation / fallout from their neighbor's catastrophe would respect national borders?
cbmuser 5y ago
France is supplying electricity to all of its neighbors and they’re trading in the same market. Thus, if electricity is scarse and expensive across Europe, French wholesale prices rise as well. FWIW, the French government forces EDF to sell the electricity to its national competitors at a fixed price of around 50 Euro/MWh, IIRC.
- legulere 5y ago
  Germany is a net-exporter of electricity https://www.cleanenergywire.org/factsheets/germanys-energy-consumption-and-power-mix-charts https://www.cleanenergywire.org/factsheets/germanys-energy-c...
  - JPKab 5y ago
    "Net exporter" doesn't really matter for the specific conversation at hand. A better way to quantify grid health would be to identify periods of peak demand across northwestern/central Europe, and then tally who is selling power to whom at those inflated prices. I have solar panels on my home, as do most of the homes in my neighborhood. However, we recently had to have a natural gas substation built adjacent to the community to deal with the demand surges coinciding with supply disruptions (every time it snows).
    - hiram112 5y ago
      Just out of curiosity, assuming your internal batteries are charged to the max (e.g. after a sunny day), about how long can you go if it starts snowing or is very cloudy, before you need to start pumping in natural gas? Maybe my understanding of how it all works using your own solar panel and the neighborhood's gas lines is too simplistic, though, to answer.
      - TheSpiceIsLife 5y ago
        I don't think the comment you replied to said anything about having batteries?
      - 5y ago
Darmody 5y ago
And when the wind stops blowing, Spain has to buy nuclear energy at a premium price from France.
simonebrunozzi 5y ago
Large quantities of energy (e.g. from Nuclear) are bought in advance (between countries, and less often between companies), and with multiple years contracts. That's why you don't see a huge difference.
rsj_hn 5y ago
> Yet their prices track each other closely. If by "track each other closely", you mean prices in Germany are reliably 50% higher than those in France[1], then yes, they "track each other" closely. German energy policy has been an unmitigated disaster, creating by far the most expensive electricity prices in the OECD and of course the highest in Europe, whereas prices in France are below the EU average. https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Electricity_price_statistics https://ec.europa.eu/eurostat/statistics-explained/index.php...
- looki 5y ago
  The source refers to retail electricity prices and thus doesn't apply here. The German electricity price is subject to lots of different taxes and fees; energy generation makes up less than a quarter of it [1]. These taxes do not need to exist and even the "EEG" which subsidizes renewables could be paid via the general budget. Like, for example, power plants could be paid for by the state. The comparison of household prices therefore makes little sense, as it implies the governments are in a race to offer the lowest rates to its population. [1]: https://strom-report.de/medien/strompreis-deutschland-2021.jpg https://strom-report.de/medien/strompreis-deutschland-2021.j...
  - rsj_hn 5y ago
    So according to your logic, taxes used to subsidize electricity production should not be included when calculating the cost of electricity, which can only give rise to a meaningless cost. Germany imposes such high taxes because they have such massive subsidies for producers. That is why electricity costs so much more in Germany — because it costs so much more to produce. But being fungible, the cost of wholesale electricity on the transnational exchanges will of course tend to the law of one price. It is the taxes that bring this in line with reality as to the fully loaded cost of generation, which in Germany is much higher.
    - looki 5y ago
      >Germany imposes such high taxes because they have such massive subsidies for producers. Even without the EEG, the electricity price would be among the highest in all of Europe. Also, given how much public money coal for example receives in Germany, I think it is a very reasonable argument that the EEG subsidy should not really be considered a fixed part of the electricity price that could not be moved elsewhere.
mytailorisrich 5y ago
That's because market prices are what they are, they don't depend on whether it's "gas electricity" or "nuclear electricity". Now, if you produce electricity by burning gas that you import and gas prices go through the roof then your production costs follow and your stuck. In the meantime, production costs of nuclear plants have not moved at all. Which makes controlling consumer prices much more doable and less costly, for instance, you can sell that electricity with improved profit margins (and France does export a lot of electricity).
filmor 5y ago
All relevant mechanisms (day-ahead auction and intraday continuous auction) take the interconnector capacities into account. The dayahead mechanism is described at length here: https://www.nordpoolgroup.com/globalassets/download-center/single-day-ahead-coupling/euphemia-public-description.pdf https://www.nordpoolgroup.com/globalassets/download-center/s... During the intraday auctions, the left-over capacities are considered live, i.e. if there is 100MW of capacity left for France to Germany, you get the first 100MW of the French orderbook merged into the German one. If a trade happens, this capacity is updated. This is called SIDC (Single Intraday Coupling), https://www.emissions-euets.com/internal-electricity-market-glossary/2033-single-intraday-coupling-sidc?Itemid=118 https://www.emissions-euets.com/internal-electricity-market-..., used to be called XBID.
___luigi 5y ago
+ This map shows these statistics https://www.electricitymap.org/map https://www.electricitymap.org/map

throwaway894345 5y ago

Do these countries trade energy in the same markets? If so, that would explain it, wouldn’t it?

dan-robertson 5y ago
That’s the question I ask in the second paragraph. It only explains it if the interchange is sufficiently large. Another explanation could be that there is some EU mechanism to charge the same wholesale price even if there is not sufficient interchange capacity.

kindle-dev 5y ago

France is the the largest nuclear energy exporter, but it only exports about 12% of its nuclear energy, which might be enough to move the domestic price.

AnthonyMouse 5y ago
If that 12% is the annual average, also keep in mind that it's presumably ~25% sometimes and ~0% at other times. Now suppose the domestic production is 100 GW, the domestic consumption is 90 GW and you're not exporting anything. Compare this to when the domestic production and consumption are still the same but you're exporting 20 GW. You go from having 10 GW to spare to being 10 GW short and having to bid for it against the foreign market. And the prices aren't linear. In oversupply you could be paying barely anything. At 10% undersupply you could be paying twenty times as much if that's how much it takes to reduce demand by 10%.

refurb 5y ago

If you have interconnects, energy is fungible - just like oil or other commodities.

Retric 5y ago
Electricity is only fungible on a second by second basis while ignoring transmission losses. Local power production has a significant advantage. This gets offset when distant locations have significant geographic advantages like hydroelectric power or wind etc, or when peak production or demand varies between locations.

gumby 5y ago

Actually it appears that this is how it works, though in this case it’s more purchases from Czech than France.

shakow 5y ago

> but my assumption is that they cannot carry enough power Right now (https://www.electricitymap.org/zone/DE https://www.electricitymap.org/zone/DE), Germany is importing from France alone the equivalent of a bit under two French nuclear power plants at full power.

fundatus 5y ago
Might be, but in total Germany is a net exporter of electricity.
- shakow 5y ago
  1. That's not the point, the point being to illustrate how interconnected the EU grid is. 2. Regarding your comment, I personally don't see Germany importing 72 gCO2/MW power to export 399 gCO2/MW power as a good thing for anyone but coal companies, but whatever floats your boat.
  - KingOfCoders 5y ago
    "the point being to illustrate how interconnected the EU grid is." Which is a good thing. Very few countries are self sufficient regarding cars for example, or Kiwis. So humanity invented trading and people trade things they don't have for things they have - so good interconnection is a good thing.
    - shakow 5y ago
      > Which is a good thing Absolutely.
- cbmuser 5y ago
  That’s irrelevant since Germany is often exporting electricity at cheap or even negative prices. The net value also doesn’t buy you anything if you have to import electricity due to lack of local production. France can self-supply itself with electricity.

PeterisP 5y ago

There's no "French and German grids", most of EU is a single grid (see map https://en.wikipedia.org/wiki/Synchronous_grid_of_Continental_Europe#/media/File:Wide_area_synchronous_grid_(Eurasia,_Mediterranean).png https://en.wikipedia.org/wiki/Synchronous_grid_of_Continenta...) and there's no meaningful difference between "interconnects" linking France and Germany and power lines within France, though there are a bit fewer of them than internal lines. There are some limited interconnects linking continental EU with UK and Scandinavia with some trade happening over them.

Symbiote 5y ago
Or see https://www.entsoe.eu/data/map/ https://www.entsoe.eu/data/map/ for a map of the transmissions lines.
jacquesm 5y ago
That may be so but there is a tremendous difference in quality and capacity to absorb fluctuations between the various interconnected national grids. At the physical level they are still very much separate.
Retric 5y ago
Calling it one grid is kind of misleading. There is nowhere near enough transmission if all power production in say Spain failed even if in theory there is enough excess capacity across the EU to provide power to Spain. Limits on transmission result in individual countries generally having significantly different wholesale prices.
- Symbiote 5y ago
  Isn't that the case with a grid of any size? The British grid has a North - South imbalance, if I understand that correctly 20% of power would be lost with a 1500km transmission distance. Replacing all the power of Spain would be very inefficient, even if the connections did exist. https://en.wikipedia.org/wiki/National_Grid_(Great_Britain) https://en.wikipedia.org/wiki/National_Grid_(Great_Britain) (Power Flow section)

in3d 5y ago

It will go down to 0% in Germany in several months. Germany is shutting down its last six nuclear power plants and no new ones can be built. Italy, Switzerland and Belgium also want to shut down their nuclear power plants. Shameful, unscientific public opinion in Western Europe despite more people realizing the danger of global warming.

betaby 5y ago
There are no nuclear plants in Italy producing commercially available electricity AFAIK.
- danmaz74 5y ago
  A referendum after Chernobyl forced the Italian government to shut down all nuclear power plants in Italy before the 90s
ddalex 5y ago
Eastern will happily pick up the slack on new nuclear power plants and sell that electricity to balance the trade.
- rini17 5y ago
  Both Czechs and Slovaks are building new nuclear blocks (Temelin and Mochovce) but the progress is slow and riddled by corruption. So it's doubtful they will come online soon.
neuronic 5y ago
The mistakes were made 30 years ago and once more after Fukushima. Germany should have gotten off coal first, then nuclear. Or it should have built modern reactors 20 years ago. Now it's too late, too long and too expensive.
hiram112 5y ago
While I understand the fear of nuclear, especially in Europe where Chernobyl took place, I find it kind of silly that countries like Germany, Switzerland, Italy, Belgium, etc are shutting down THEIR nukes, while bordering France (and other countries) who aren't shutting them down. Do they imagine that the radiation / fallout from their neighbor's catastrophe would respect national borders?

cbmuser 5y ago

France is supplying electricity to all of its neighbors and they’re trading in the same market. Thus, if electricity is scarse and expensive across Europe, French wholesale prices rise as well. FWIW, the French government forces EDF to sell the electricity to its national competitors at a fixed price of around 50 Euro/MWh, IIRC.

legulere 5y ago
Germany is a net-exporter of electricity https://www.cleanenergywire.org/factsheets/germanys-energy-consumption-and-power-mix-charts https://www.cleanenergywire.org/factsheets/germanys-energy-c...
- JPKab 5y ago
  "Net exporter" doesn't really matter for the specific conversation at hand. A better way to quantify grid health would be to identify periods of peak demand across northwestern/central Europe, and then tally who is selling power to whom at those inflated prices. I have solar panels on my home, as do most of the homes in my neighborhood. However, we recently had to have a natural gas substation built adjacent to the community to deal with the demand surges coinciding with supply disruptions (every time it snows).
  - hiram112 5y ago
    Just out of curiosity, assuming your internal batteries are charged to the max (e.g. after a sunny day), about how long can you go if it starts snowing or is very cloudy, before you need to start pumping in natural gas? Maybe my understanding of how it all works using your own solar panel and the neighborhood's gas lines is too simplistic, though, to answer.
    - TheSpiceIsLife 5y ago
      I don't think the comment you replied to said anything about having batteries?
    - 5y ago

Darmody 5y ago

And when the wind stops blowing, Spain has to buy nuclear energy at a premium price from France.

simonebrunozzi 5y ago

Large quantities of energy (e.g. from Nuclear) are bought in advance (between countries, and less often between companies), and with multiple years contracts. That's why you don't see a huge difference.

rsj_hn 5y ago

> Yet their prices track each other closely. If by "track each other closely", you mean prices in Germany are reliably 50% higher than those in France[1], then yes, they "track each other" closely. German energy policy has been an unmitigated disaster, creating by far the most expensive electricity prices in the OECD and of course the highest in Europe, whereas prices in France are below the EU average. https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Electricity_price_statistics https://ec.europa.eu/eurostat/statistics-explained/index.php...

looki 5y ago
The source refers to retail electricity prices and thus doesn't apply here. The German electricity price is subject to lots of different taxes and fees; energy generation makes up less than a quarter of it [1]. These taxes do not need to exist and even the "EEG" which subsidizes renewables could be paid via the general budget. Like, for example, power plants could be paid for by the state. The comparison of household prices therefore makes little sense, as it implies the governments are in a race to offer the lowest rates to its population. [1]: https://strom-report.de/medien/strompreis-deutschland-2021.jpg https://strom-report.de/medien/strompreis-deutschland-2021.j...
- rsj_hn 5y ago
  So according to your logic, taxes used to subsidize electricity production should not be included when calculating the cost of electricity, which can only give rise to a meaningless cost. Germany imposes such high taxes because they have such massive subsidies for producers. That is why electricity costs so much more in Germany — because it costs so much more to produce. But being fungible, the cost of wholesale electricity on the transnational exchanges will of course tend to the law of one price. It is the taxes that bring this in line with reality as to the fully loaded cost of generation, which in Germany is much higher.
  - looki 5y ago
    >Germany imposes such high taxes because they have such massive subsidies for producers. Even without the EEG, the electricity price would be among the highest in all of Europe. Also, given how much public money coal for example receives in Germany, I think it is a very reasonable argument that the EEG subsidy should not really be considered a fixed part of the electricity price that could not be moved elsewhere.

mytailorisrich 5y ago

That's because market prices are what they are, they don't depend on whether it's "gas electricity" or "nuclear electricity". Now, if you produce electricity by burning gas that you import and gas prices go through the roof then your production costs follow and your stuck. In the meantime, production costs of nuclear plants have not moved at all. Which makes controlling consumer prices much more doable and less costly, for instance, you can sell that electricity with improved profit margins (and France does export a lot of electricity).

filmor 5y ago

All relevant mechanisms (day-ahead auction and intraday continuous auction) take the interconnector capacities into account. The dayahead mechanism is described at length here: https://www.nordpoolgroup.com/globalassets/download-center/single-day-ahead-coupling/euphemia-public-description.pdf https://www.nordpoolgroup.com/globalassets/download-center/s... During the intraday auctions, the left-over capacities are considered live, i.e. if there is 100MW of capacity left for France to Germany, you get the first 100MW of the French orderbook merged into the German one. If a trade happens, this capacity is updated. This is called SIDC (Single Intraday Coupling), https://www.emissions-euets.com/internal-electricity-market-glossary/2033-single-intraday-coupling-sidc?Itemid=118 https://www.emissions-euets.com/internal-electricity-market-..., used to be called XBID.

___luigi 5y ago

+ This map shows these statistics https://www.electricitymap.org/map https://www.electricitymap.org/map