9 ms·
If you are asking yourself why prices in Germany are so high: It's mostly the price surge of natural gas after Russia cut off deliveries in retaliation to sanct
by tfourb 4y ago
If you are asking yourself why prices in Germany are so high: It's mostly the price surge of natural gas after Russia cut off deliveries in retaliation to sanctions in the wake of the war against Ukraine.
About 50% of the price per kw/h in Germany is set by an auction system. Electricity providers are bidding at any given point in time to provide energy for the grid. The lowest price per kw/h wins. BUT: because no one provider can satisfy the demand on their own, all bids that are necessary to satisfy the demand are considered and the final price is set by the most expensive bid within that range. So even if a wind turbine can provide energy at 9 cents per kw/h, if current demand requires electricity from a natural gas plant at 20 cents per kw/h, all providers within the bracket will get those 20 cents per kw/h from the consumer.
Natural gas has become quite expensive for the past year in Germany and for various reasons, natural gas plants are often the marginal providers in the German network.
The other half of the final price is split about 50/50 between the owners of the network and taxes.
- mpreda 4y agoTo think there were nuclear reactors already built and running perfectly fine in Germany. That were closed down presumably for ecological reasons. Burning coal and natural gas instead.
- ChuckNorris89 4y agoNot just any coal, but lignite, the nastiest, dirtiest kind of coal. Definitely greener than nuclear. /s
- this_user 4y agohttps://upload.wikimedia.org/wikipedia/commons/thumb/3/3b/Energymix_Germany.svg/2560px-Energymix_Germany.svg.png https://upload.wikimedia.org/wikipedia/commons/thumb/3/3b/En...
- jenadine 4y agoImagine if they had been growing the nuclear instead of reducing it, it would have allowed to almost get rid of lignite and coal. Instead it is still a portion. (And solar and wind being intermittent you can't just have that)
- 0x073 4y agoNulcear is only for base load, coal can be used for medium spikes. Nuclear can't replace coal for this.
- Aeolun 4y agoI’m inclined to believe solar and wind have similar percentages of storage available.
- yodelshady 4y agoThat's just a lie.
- amadeuspagel 4y agoGraph only goes until 2020.
- yodelshady 4y agoAny chart that misses 2022 in Germany's consumption is just mendacious.
- concordDance 4y agoWhat happened then and do you have a graph that includes it?
- skrause 4y agoAnd yet Germany has fewer CO2 emissions per kWh of electricity produced than the USA.
- ChuckNorris89 4y agoYeah but you're breathing coal dust
- Robotbeat 4y agoBarely. It's not really much different. For the full year 2021, about 350gCO2/kWh in Germany vs 375gCO2/kWh. Germany spent an insane amount of money, punished the use of electricity effectively (therefore undermining their own competitiveness in EVs), caused a significantly negative impact on household finances and industrial competitiveness (to the advantage of coal-powered China) and still only gets roughly US level of cleanliness in electricity. Because they simultaneously decided to get rid of nuclear power plants. shrug
- IdiocyInAction 4y agoAlso the only fossil fuel Germany has in abundance in its own territory.
- pydry 4y agoThey werent that many to begin with they growing increasingly expensive to run, were coming to the end of their lifespan and Fukushima was a risk that was hard to ignore. It's interesting how Poland's electricity mix has been 80% coal for decades and this passes without comment, but what really enrages some people is a few nuclear power plants in Germany being mostly swapped out with solar and wind energy. Doesnt seem like environmentalism is really the core issue driving this.
- reducesuffering 4y agoPoland's coal use is also a huge problem. However, they don't receive as much comment because Germany is richer, so more able to afford cleaner energy sources, and Poland wasn't ignorant and short-sighted about using Russian natural gas.
- cbmuser 4y agoPoland is actually going to build nuclear power plants soon. In ten years, Poland‘s electricity mix will be much cleaner than Germany‘s.
- robocat 4y agoEXPORTS In 2021, Poland exported $926M in Electricity. The main destination of Electricity exports from Poland are: Lithuania ($430M), Slovakia ($388M), Czechia ($56.5M), Germany ($28.8M), and Sweden ($23M). IMPORTS In 2021, Poland imported $1.45B in Electricity. Poland imports Electricity primarily from: Germany ($911M), Sweden ($299M), Lithuania ($131M), Ukraine ($63.4M), and Czechia ($43.5M).
- jacquesm 4y agoA lot of Russian gas went straight to the gas turbines of electricity generating plants, which considerably skews these figures.
- cbmuser 4y ago
- tfourb 4y agotl;dr: A country like Germany could expand its current electricity production by about 50% while simultaneously phasing out nuclear and fossil fuels at a whole sale price for electricity below current market rates and with current technology. Converting the entire electricity production of an advanced industrial economy to renewable energy (without using nuclear) is quite straightforward. In case of Germany, a 2015 study compared various scenarios for how electricity demand will develop by 2050. The most expansive scenario assumes a yearly demand of 800 TWh, compared to roughly 500 TWh in 2021. [1] The additional demand comes from electrifying cars and heating, etc. Demand does of course vary by time of day, but is virtually stable from month to month. Variability of renewable production is quite high, so let's assume that you'd need long-term grid-scale electricity buffers for about 30% of yearly demand. The most basic approach to this would be the transformation of electricity and water into Hydrogen when an excess of electricity is available and the reverse when demand outstrips supply. The combined efficiency of that process (electricity->Hydrogen->electricity) is roughly 50%. I'm actually pretty sure that by 2050 we'll have much better solutions available, but this approach is doable with current tech and has the added bonus of being able to be combined with a hydrogen infrastructure similar to how natural gas is currently used, i.e. for industrial processes and heating. That would put total yearly demand at 1,040 TWh, which based on the efficiency of currently available PV and wind turbines [2] would require a total nominal installed capacity of about 1.040 GW (based on real world data from Germany, 1 GW in installed renewable capacity is roughly equal to a yearly production of 1 TWh. This will vary based on local circumstances, but Germany is not particularly bountiful in its renewable potential compared to other countries). Currently, Germany has a total installed capacity of solar, wind and water power generation of about 125GW but I will assume that all these installations will reach their end of life before 2050 and will need to be replaced as part of this project. At current prices for the installation of new PV (700,000 €/MW) and wind onshore/offshore (3,000,000 €/MW) and assuming a 50/50 split in installed capacity, the total investment for the required 1,040 MW would come to roughly 2 Trillion Euros over 30 years, or about 66 Billion Euros per year. Divided by 800 TWh of yearly demand, this comes out to 8.3 cents (Euro) per KWh. This is comfortably below the 2021 average whole sale price of roughly 10 cents/KWh and in Germany would come out to about 20 cents/KWh for private consumers, compared to the current market average of roughly 30 cents/KWh. Of course current energy production is quite heavily subsidized by the German government. If subsidies continue (or taxes on electricity are lowered), price per KWh could be reduced substantially. This is of course only a very rough and simplified calculation. But it is straightforward and based on real world data, a pessimistic energy consumption scenario and current technologies. It ignores the potential for geothermal energy, biomass, imported hydrogen, long-distance imports of solar energy from the Sahara, or hydro power from Northern Europe, as well as likely technological improvement for generating and storing renewable energy. Looking at this, I find it hard to believe that absent a complete revolution of reactor design and cost-effectiveness, nuclear power will have any serious role to play in this, given its regulatory challenges, capital expenditure requirements, construction times and unsolved waste management issues. [1] https://www.agora-energiewende.de/fileadmin/Projekte/2015/Stromverbrauch_in_der_Energiewende/086_IWES_Szenarienvergl_dt_WEB.pdf https://www.agora-energiewende.de/fileadmin/Projekte/2015/St... [2] https://www.smard.de/home/marktdaten https://www.smard.de/home/marktdaten
- thallium205 4y ago[flagged]
- tfourb 4y agoEven if you are a connoisseur of conspiracy theories, this comment is bullshit. The pipelines in question actually did not carry any natural gas at the time of the explosion. Both pipelines of Nord Stream 1 were destroyed but deliveries by Russia had been stopped well before that in retaliation to German/EU sanctions. One of the two pipelines of Nord Stream 2 was destroyed, but that project was never activated, due to a decision by Germany's government to cancel certification after Russia's attack on Ukraine.
- carlosjobim 4y ago> conspiracy theories What? The pipeline didn't blow up by itself, so some party had to conspire to blow it up.
- tfourb 4y agoThere is currently no evidence whatsoever that the US was involved in the attack on the pipeline in any way. To the best of my knowledge, the current best lead is a group of allegedly Ukrainian nationals who hired a private boat and were in the area where the explosions happened during the time in question. Ukraine is denying any involvement (of course) and the people in question have not been apprehended. The only reasoning that currently points to the US is that they would have the technical capabilities and a motive, but that applies to dozens of actors, including Russia.
- carlosjobim 4y agoBiden made public utterances that falls within him admitting the USA would attack the pipeline, so that's at least some evidence. But no matter who committed the terrorist attack, they for sure conspired to do it. The attack is a conspiracy by definition and by law, so any speculation as to the culprit will be a conspiracy theory - including your speculation that it was Ukrainians.
- tomp 4y agoYou describe the auction system as a bad thing. But actually it's a good thing. The providers who (through investment and/or technological superiority) are able to provide cheaper electricity, make more money. Capitalist progress engine at its finest!
- tfourb 4y agoI don't think I provided any judgement whatsoever, I just described how it works and the effects it had in this specific situation. Both are correct as I described them, to the best of my knowledge. If you are interested in my opinion, I'm perfectly willing to accept that this kind of auction system works efficiently and effectively under normal circumstances. But in this specific scenario, it led to consumer prices rising by about 130% due to a sudden geopolitical shock. I personally find this less than ideal and I would have preferred a system that provides a bit more stability, because electricity is a fundamental need. Price jumps of this nature were unheard of in Germany, so no one was prepared for them, either.
- cbmuser 4y agoThe problem aren’t the gas plants, the problem is the insufficient amount of cheap electricity on the market. Wind and PV heavily rely on backup power plants. So building a lot of wind and PV increases the reliance on gas plants instead of reducing it. Even the government’s own energy agency "DENA" makes this claim. See: https://www.dena.de/fileadmin/dena/Dokumente/Pdf/9262_dena-Leitstudie_Integrierte_Energiewende_Ergebnisbericht.pdf https://www.dena.de/fileadmin/dena/Dokumente/Pdf/9262_dena-L... (p. 28f).
- TheLoafOfBread 4y agoIt is a paradox. The more renewables you will build, the more dependent on fossil fuels you will become.
- tfourb 4y agoUp to a point. Long term the idea is to get rid of fossil fuels entirely and there are good indications that this is achievable.
- cbmuser 4y agoNo, the main reason is Germany shutting down nuclear power plants and replacing them with fossil fuels. I know that lots of people will argue that wind and solar will lower electricity prices, but since these don’t provide reliable baseload, Germany needs to have lots of fossile power plants in standby. These doubled structures make the whole system inefficient and expensive.
- yladiz 4y agoThis isn’t the reason prices are higher. Even if Germany was using nuclear for most electricity, there’s a ton of gas being used in the industry and in homes (like for heating). Using non-nuclear power surely makes things a little more expensive, but it’s definitely not the reason prices are higher than (supposedly) anywhere else in the world.
- legulere 4y agoAll your claims are baseless and untrue. Nuclear was replaced with renewables while also reducing fossil fuel use [1]. Prices are so high because of taxes and a lack of subsidies. Market prices are lower than in France [2]. Apart from gas prices, having to save France from its nuclear energy crunch was another factor for the rise in prices. [1]: https://reddit.com/r/uninsurable/comments/12agamh/german_electricity_since_2010_nuclear_and_net/ https://reddit.com/r/uninsurable/comments/12agamh/german_ele... [2]: https://reddit.com/r/uninsurable/comments/12dtygj/comparison_of_german_and_french_power_futures_for/ https://reddit.com/r/uninsurable/comments/12dtygj/comparison... [3]: https://reddit.com/r/uninsurable/comments/12afq01/germany_keeps_the_lights_on_in_france_2022/ https://reddit.com/r/uninsurable/comments/12afq01/germany_ke...
- voisin 4y ago> all bids that are necessary to satisfy the demand are considered and the final price is set by the most expensive bid within that range What’s the logic here? Why not just accept bids in order of ascending price until demand is met?
- Dylan16807 4y agoBecause then everyone with cheap production starts bluffing and bidding 19.99 cents and the end result is the same price but now the market is deceptive and unstable.
- wcoenen 4y agoI don't know the answer, but this is known as a "uniform-price auction", as opposed to "pay-as-bid auction". There is a lot of literature on the subject. For electricity markets, things are complicated by the finite capacity of transmission links and lack of storage.
- pyrale 4y agoBecause then, providers would try to guess the highest bid and bid $1 lower. As every bidder would miss once in a while, that loss would be factored in prices, and raise prices overall. This bidding system ensures that everyone can publish their lowest bid with no fear of losing out, and by doing so, it maximizes publicly available data so regulators and TSOs have a good idea of what is actually available and which investments are necessary.
- deleted 4y ago[deleted]
- xienze 4y agoGermany wasn’t exactly known for having reasonably priced electricity before Ukraine though.
- lunatuna 4y agoI would add that part of the difference is service level between the US and Germany. In Germany the outages are far less frequent and for a lot less time.
- prepend 4y agoOutages in the US are very rare. I’ve had three outages in the past 15 years. Two were just a second or two and came back on, one was for a few hours after a big storm. Of course the US is huge so service levels vary depending on where you are.
- jacquesm 4y agoAugust 14th, 2003. edit: That date is engraved in my memory: https://jacquesmattheij.com/a-world-without-power/ https://jacquesmattheij.com/a-world-without-power/
- crote 4y ago2000/2001 California electricity crisis, 2003 Northeast blackout, 2011 Southwest blackout, 2019 California rolling shutoffs, 2021 Texas blackout. In Quebec over a million people lost power last Wednesday, and four days later over 100.000 are still without power. The only one I can think of in Europe is the 2003 Italy blackout. And that's just the major ones. I can't even imagine how often people in tornado/hurricane-prone areas must have to deal with blackouts due to the local electricity wires being on poles.
- derriz 4y agoOn average an electricity customer in the USA experiences more the 20 times the interruption to service compared to one in Germany when measured by annual minutes of outage per customer. https://en.wikipedia.org/wiki/SAIDI https://en.wikipedia.org/wiki/SAIDI
- lm28469 4y ago> It's mostly the price surge of natural gas after Russia cut off deliveries I already paid twice as much per kwh as my friends who stayed in France, that was the case since 2017 Since the Russian gas episode I pay 3-4x more
- Faaak 4y agoNitpicking here, but it's kWh (kW * hour) and not kW/h
- tfourb 4y agoyou are right, thanks for pointing it out.
- legulere 4y agoWhat you are describing is mostly about market prices. Market prices rose also in the rest of Europe. The biggest factor really are the taxes. The market price for electricity is lower in Germany than in France, still consumer prices are much higher in Germany.