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The German government had (has?) a program where operators of powerplants have a guaranteed kilowatt price for their electricity, completely independent of the

The German government had (has?) a program where operators of powerplants have a guaranteed kilowatt price for their electricity, completely independent of the market price. Apparently these were some absolutely great investments, of course financed by tax payers.

leftbit 1y ago
Had. Now we have the "Merit Order Principle". Cheap energy (i.e. renewables) are used first but the price is determined by the most expensive energy source running. (See https://de.wikipedia.org/wiki/Merit-Order https://de.wikipedia.org/wiki/Merit-Order) So if you're running a solar park you have production costs of about 5ct/kWh. But if there's also a gas plant running you get maybe 20ct/kWh. Instaprofit. https://de.wikipedia.org/wiki/Stromgestehungskosten https://de.wikipedia.org/wiki/Stromgestehungskosten
- loehnsberg 1y ago
  Uniform pricing creates huge windfall profits for those cheap generators too, which incentivizes more investment. I‘m not saying there‘s collusion but the incentive to keep a gas turbine in the stack is clearly given.
uecker 1y ago
Indeed, and it was highly successful creating an economy of scale for PV and driving prices down (which is the main difference to nuclear, where - despite subsidies - cost always increased). Guaranteed feed-in-tariff was also reduced accordingly and is now much lower than it used to be and does not apply to all systems anymore.
- constantcrying 1y ago
  Totally agree, that is why Germany now has some of the lowest energy prices in the developed world, which greatly helps in keeping its industry competitive and maintain the viability of energy intensive manufacturing inside of Germany.
  - uecker 1y ago
    The sarcasm is not appropriate as it is based on flawed analysis.
    - constantcrying 1y ago
      The electricity prices have done enormous harm to the German economy, the energy transitions is completely botched and has played a serious part in the persistent German recession.
      - uecker 1y ago
        The electricity prices are high and somewhat harmful. But no, I don't think the rest is true and I studies this in detail. Let's go back to my original claim: The economy of scale brought PV prices down substantially. This is easy to verify. Agreed?
  - loehnsberg 1y ago
    You get electricity at the same price in Japan and at half the price in the US. Message to the policy-maker: just be resource-rich. How exactly do you implement this?

leftbit 1y ago

Had. Now we have the "Merit Order Principle". Cheap energy (i.e. renewables) are used first but the price is determined by the most expensive energy source running. (See https://de.wikipedia.org/wiki/Merit-Order https://de.wikipedia.org/wiki/Merit-Order) So if you're running a solar park you have production costs of about 5ct/kWh. But if there's also a gas plant running you get maybe 20ct/kWh. Instaprofit. https://de.wikipedia.org/wiki/Stromgestehungskosten https://de.wikipedia.org/wiki/Stromgestehungskosten

loehnsberg 1y ago
Uniform pricing creates huge windfall profits for those cheap generators too, which incentivizes more investment. I‘m not saying there‘s collusion but the incentive to keep a gas turbine in the stack is clearly given.

uecker 1y ago

Indeed, and it was highly successful creating an economy of scale for PV and driving prices down (which is the main difference to nuclear, where - despite subsidies - cost always increased). Guaranteed feed-in-tariff was also reduced accordingly and is now much lower than it used to be and does not apply to all systems anymore.

constantcrying 1y ago
Totally agree, that is why Germany now has some of the lowest energy prices in the developed world, which greatly helps in keeping its industry competitive and maintain the viability of energy intensive manufacturing inside of Germany.
- uecker 1y ago
  The sarcasm is not appropriate as it is based on flawed analysis.
  - constantcrying 1y ago
    The electricity prices have done enormous harm to the German economy, the energy transitions is completely botched and has played a serious part in the persistent German recession.
    - uecker 1y ago
      The electricity prices are high and somewhat harmful. But no, I don't think the rest is true and I studies this in detail. Let's go back to my original claim: The economy of scale brought PV prices down substantially. This is easy to verify. Agreed?
- loehnsberg 1y ago
  You get electricity at the same price in Japan and at half the price in the US. Message to the policy-maker: just be resource-rich. How exactly do you implement this?