4 ms·

It’s puzzling. Just the other day, it was reported that their power surplus was so significant that rates were even negative. So, why are end-users still paying

It’s puzzling. Just the other day, it was reported that their power surplus was so significant that rates were even negative. So, why are end-users still paying high prices? Is it because of the distribution costs?

maccard 2y ago
The high prices people pay is the cost of having power when it’s not windy/sunny
- patall 2y ago
  The prices were already high before wind and solar power came to be (and for quite many years grid prices where among the lowest in EU, while consumer prices where among the highest). The high consumer prices for electricity in Germany are a result of grid fees, taxes, taxes on grid fees, taxes on taxes, and a lack of political will to lower those.
  - lyu07282 2y ago
    It's a give and take between profits and taxes, a wonderful symbiosis of neoliberal politics and the oligopoly.
  - maccard 2y ago
    I live in the UK where we people point at the rest of Europe and say "why are our prices so high here when we have 50+% of our power coming from wind". > The high consumer prices for electricity in Germany are a result of grid fees Grid fees are a coverall for "making sure the whole thing runs", which in my mind covers "making sure there's gas (at least that's what we use in the UK) to cover the shortfall when it's not windy". The Gas stations need to be able to spin up to handle the demand, so it's an abritrage where you really want to maximise the amount of wind you use, while paying as little overhead to keep the gas ready to go. It's like being on-call, and having your on-call pay amortized into your regular pay.
dagw 2y ago
Prices fluctuated a lot based on weather and demand. Seeing order of magnitude fluctuations day to day is not uncommon. Prices can be close to zero one day and hit record highs 24 hours later.
em500 2y ago
There's a big demand-supply mismatch throughout both the 24hr and the 365d cycle, while most consumer prices are flat throughout the day and the year. Solar panel owners are basically using the grid as a big battery, and miffed that electricity storage doesn't come cheap. (They'll discover the same thing if they buy home batteries to store their self-generated power.)
- Gasp0de 2y ago
  Actually, this is not the case in Germany, as we do not have net metering (feeding into the grid does not give you as much money as consuming from the grid costs).
derrasterpunkt 2y ago
It is because of merit order. The most expensive generator of energy sets the price for all the energy. https://en.wikipedia.org/wiki/Merit_order https://en.wikipedia.org/wiki/Merit_order
- benjymo 2y ago
  If rates go negative this isn't relevant. You can get dynamic contracts based on the day ahead price in Germany. You pay a negative price for the electricity there. You still have to pay a transmission fee and taxes, so the actual end price is almost never negative though. Of course sometimes you also pay much more than normal contracts. Also without merit order, you'd still pay close to the most expensive source on the spot market. It's a consequence of the open grid where demand and supply has to match and price is not fixed.
bluGill 2y ago
Distribution is one of the costs. For discussion lets call it 10% of your power bill (someone can find real numbers, but that will work if like me you are too lazy to look it up). However there are other costs - you pay to maintain the backup systems that are not in use. I know of a generator installed in 1920 connected to a coal boiler built in 1880 - this horribly inefficient system (by modern standards) takes about 12 hours to turn on when needed - but gets regular maintenance including pressure testing just to be sure it works for the one time every 5 years when all the other backup systems are not enough - that is not free and you pay for the costs even though you rarely get power from it. (well you probably live in a different part of the world and so could not get power from it - but there is something like it that you are paying for)

maccard 2y ago

The high prices people pay is the cost of having power when it’s not windy/sunny

patall 2y ago
The prices were already high before wind and solar power came to be (and for quite many years grid prices where among the lowest in EU, while consumer prices where among the highest). The high consumer prices for electricity in Germany are a result of grid fees, taxes, taxes on grid fees, taxes on taxes, and a lack of political will to lower those.
- lyu07282 2y ago
  It's a give and take between profits and taxes, a wonderful symbiosis of neoliberal politics and the oligopoly.
- maccard 2y ago
  I live in the UK where we people point at the rest of Europe and say "why are our prices so high here when we have 50+% of our power coming from wind". > The high consumer prices for electricity in Germany are a result of grid fees Grid fees are a coverall for "making sure the whole thing runs", which in my mind covers "making sure there's gas (at least that's what we use in the UK) to cover the shortfall when it's not windy". The Gas stations need to be able to spin up to handle the demand, so it's an abritrage where you really want to maximise the amount of wind you use, while paying as little overhead to keep the gas ready to go. It's like being on-call, and having your on-call pay amortized into your regular pay.

dagw 2y ago

Prices fluctuated a lot based on weather and demand. Seeing order of magnitude fluctuations day to day is not uncommon. Prices can be close to zero one day and hit record highs 24 hours later.

em500 2y ago

There's a big demand-supply mismatch throughout both the 24hr and the 365d cycle, while most consumer prices are flat throughout the day and the year. Solar panel owners are basically using the grid as a big battery, and miffed that electricity storage doesn't come cheap. (They'll discover the same thing if they buy home batteries to store their self-generated power.)

Gasp0de 2y ago
Actually, this is not the case in Germany, as we do not have net metering (feeding into the grid does not give you as much money as consuming from the grid costs).

derrasterpunkt 2y ago

It is because of merit order. The most expensive generator of energy sets the price for all the energy. https://en.wikipedia.org/wiki/Merit_order https://en.wikipedia.org/wiki/Merit_order

benjymo 2y ago
If rates go negative this isn't relevant. You can get dynamic contracts based on the day ahead price in Germany. You pay a negative price for the electricity there. You still have to pay a transmission fee and taxes, so the actual end price is almost never negative though. Of course sometimes you also pay much more than normal contracts. Also without merit order, you'd still pay close to the most expensive source on the spot market. It's a consequence of the open grid where demand and supply has to match and price is not fixed.

bluGill 2y ago

Distribution is one of the costs. For discussion lets call it 10% of your power bill (someone can find real numbers, but that will work if like me you are too lazy to look it up). However there are other costs - you pay to maintain the backup systems that are not in use. I know of a generator installed in 1920 connected to a coal boiler built in 1880 - this horribly inefficient system (by modern standards) takes about 12 hours to turn on when needed - but gets regular maintenance including pressure testing just to be sure it works for the one time every 5 years when all the other backup systems are not enough - that is not free and you pay for the costs even though you rarely get power from it. (well you probably live in a different part of the world and so could not get power from it - but there is something like it that you are paying for)