Price drop in onshore wind auction / German power trading zone unity
Federal Grid Agency
The price for onshore wind power fell a further ten percent in Germany’s third auction for the technology to an average of 3.8 cents per kilowatt-hour. The federal grid agency (BNetzA) said the winning bids came almost exclusively from projects proposed by citizen cooperatives. “The bidders now have four and a half years to implement their projects, and according to our judgement, they assume a positive technological development and falling prices in their offers,” said the agency’s head Jochen Homann. The 61 winning bids with a total capacity of 1,000 megawatts ranged from 2.2 to 3.82 ct/kWh. “This auction round was dominated by projects without planning permission. In the first two onshore wind auction rounds in 2018 an existing planning permission will be compulsory for participation.”
Find the press release in German here.
German Wind Energy Association (BWE)
The price drop at the onshore wind auction is good news for consumers and policymakers, but they increase the risk that the construction of wind energy projects will fall off a cliff in 2019 and 2020 in Germany, according to the Wind Energy Association (BWE). Citizen cooperative projects successful in the auction bet on technologies that are not yet established on the market, according to BWE. In contrast, projects by other investors need a planning permission linked to a specific technology and are therefore at a competitive disadvantage, the BWE says.
Find background in the article Booming German wind power sector fears 2019 cliff and the factsheet From survey to harvest: How to build a wind farm in Germany.
Federal Ministry for Economic Affairs and Energy (BMWi) / Clean Energy Wire
Germany’s acting government has adopted a draft regulation that bans transmission grid operators (TSOs) from unilaterally splitting the German power trading zone. “What distinguishes the German trading zone is its unity, which ensures equal conditions regarding grid access, power production, and power use across the country”, said State Secretary Rainer Baake in a press release. The BMWi argues that the acting government had the right to make this decision, because the draft regulation simply enshrined the status quo that had not been regulated to date. “The next federal government is free to reassess the design of the German power trading zone,” writes the ministry.
Splitting the trading zone would likely lead to lower power prices in the north, where the bulk of the country’s renewable power capacity is located, and to higher prices in the south. The lack of sufficient north-south grid connections means that excess power from the north can often not be transferred to the south, where the large industrial consumers are concentrated. The council of federal state governments now has to decide on the regulation.
Read the press release in German here, and the draft regulation in German here.
Read a CLEW article about the advent of the power market debate here, and a factsheet on loop flows here.
Fossil power plant operator Uniper is axing around 2,000 jobs, or 14 percent of its workforce, as part of its cost-cutting programme, the company’s finance chief told the daily Rheinische Post. Uniper was spun off from E.ON in 2016, and said at the time that it planned to save 400 million euros by the end of 2018.
Read the Reuters article in English here.
Find the original Rheinische Post article in German here.
The parties negotiating a ‘Jamaica coalition’ in Germany had made a lot of progress on energy and climate policy, as well as on several other policy areas, before the pro-market FDP party pulled out of the talks, Cerstin Gammelin and Markus Balser report in the Süddeutsche Zeitung. According to leaked working papers from the talks, the FDP, the environmentalist Green Party, and Chancellor Angela Merkel’s conservative CDU/CSU alliance agreed to invest around 11 billion euros out of a total investment budget of over 45 billion euros in a so-called “environment and development” package. This package foresees massive investment in the modernisation of heating systems, and includes financial incentives for companies to move to regions where jobs are about to disappear due to the closure of coal plants and coal mines. The package is one of three sets of measures that were to be implemented “with priority”, the authors write.
Read the article in German here.
For background, read CLEW’s coalition watch and the article German coalition talks collapse despite progress on climate and energy.
Municipal utility WSW in the western German city of Wuppertal says that it has launched the world’s first green power trading platform based on blockchain technology. Clients can buy electricity from local renewable power producers and determine their own power mix on the “Tal.Markt” platform, which was developed in cooperation with Swiss energy trader Axpo, according to a company press release. “The concept has the potential to revolutionise power retailing”, said WSW head Andreas Feicht. He said selling power directly to consumers could save many wind and solar arrays that will no longer receive feed-in tariffs, because they cannot cover costs on the wholesale market.
Find the press release in German here.
For background, check out the factsheet Blockchain – the next revolution in the energy sector? and the dossier Digitalisation ignites new phase in energy transition.
German utility RWE and the state of North Rhine-Westphalia have rejected a court settlement offer that would have allowed the company to continue producing lignite in its largest open pit mine on the proviso that it refrained from carrying out clearing work in Hambach Forest and exploited the surrounding areas first, reports Benedikt Müller for the Süddeutsche Zeitung. The administrative court in Cologne had argued that Germany would phase out coal “at some point” anyway, which might save the forest. RWE rejected this proposal, arguing that it would not work out with its set-up of conveyor belts and excavators, writes Müller. Environmental NGO Friends of the Earth Germany (BUND) had brought legal action to save the wildlife in the region. The court is scheduled to announce its decision on 24 November.
Read the article in German here.
For background, read the CLEW factsheets Coal in Germany and When will Germany finally ditch coal?
Frankfurter Allgemeine Zeitung
Rather than big flagship projects, “subversive innovations” could prove more successful in making a breakthrough in the decarbonisation of the world’s economies, Hans Joachim Schellnhuber from the Potsdam Institute for Climate Impact Research (PIK) told the Frankfurter Allgemeine Zeitung in an interview. “These are innovations that would basically be introduced below the radar of market leaders, defenders of the status quo of who possesses what, and lobbyists, and that would be too strong to be trampled when finally noticed”, said Schellnhuber. The feed-in tariffs for renewable energies under the German Renewable Energy Act (EEG) were an example of this. They would have never been introduced had the coal industry known that they would bring down solar PV costs so much, said Schellnhuber, adding that Chinese intervention had also played a role in bringing down the price.
For background, read the CLEW dossier The reform of the Renewable Energy Act.
The German Association of Local Utilities (VKU) and the Renewable Energies Agency (AEE) have called for an increased focus on energy transition in heating to enable Germany to reach its emissions reduction targets. “Unlike in the power market, the share of renewables in the heating sector stagnates, despite the availability of efficient technologies”, said AEE Managing Director Philipp Vohrer in a joint VKU-AEE press release. All municipalities in Germany have enormous potential, he said. VKU head Katherina Reiche added that the local utilities that operate their own heating grids were key to the transition’s success.
Read the joint press statement in German here.
For background, read the CLEW dossier The Energiewende and Efficiency.