Expensive coal at home and cheap gas abroad turn Germany into net power importer

High prices for domestic coal-fired power production turned Germany into a net importer of electricity at the end of April after years of being an export champion, Frank-Thomas Wenzel writes in the Frankfurter Rundschau. Gas power plants abroad currently produce cheaper power than coal plants at home, leading Germany to import electricity, especially from France, the Netherlands and Denmark. At times the imports reached about one fifth of total power consumption, he writes. “The data is remarkable because Germany for years constantly produced much more power than it needed and exported it to its neighbours,” Wenzel says. According to energy transition think tank Agora Energiewende*, several factors have contributed to this turnaround in Germany’s power trade balance. Lots of melting snow in the Alps and Scandinavia has led to abundant power supply from hydro plants there, while at the same time natural gas prices have dropped thanks to abundant reserves currently stored across Europe. Moreover, rising prices for emissions allowances under the EU trading system ETS, up from 14 to 25 euros per tonne CO2 in just one year, mean that coal plant operators see their profit margins dwindle, the think tank says.

Thanks to the expansion of renewable energy sources and a comparatively slow reduction of conventional power production capacity, Germany has long maintained a positive power trade balance with its neighbours. While the country remains heavily dependent on importing other energy sources, such as oil and gas, Germany chalked up major profits by exporting electricity over the past years.  

*Like the Clean Energy Wire, Agora Energiewende is a project funded by Stiftung Mercator and the European Climate Foundation.