For Archival Purposes: The Effect Renewable Power Is Having On Germany's Utilities

Platts is reporting:

In the US, natural gas prices now above $4.00/MMBtu but less than that for many months have pulled down power prices. In the Electric Reliability Council of Texas power market, natural gas and coal-fired capacity both met around 36% of market’s power needs in March, while wind generation met a surprisingly high 15.2%. The average on-peak power price in March was $34.50/MWh in Texas, one of the lowest average wholesale power prices in the country.

In the UK, however, natural gas prices have been in the $10.70/MMBtu range, and wholesale power prices, in dollars, have been running at above $80.00/MWh. The UK has been investing in very expensive offshore wind capacity, and it has been burning more coal. But UK generators have not been able to avoid using expensive gas-fired capacity.

What is happening in the power sector in Germany, though, is considerably different.

At the link, the rest of the story: how renewables are affecting Germany.

A look at a given day’s dispatch of power is instructive.

On March 19, 2013, a Tuesday, German power demand was met by 47,600 MW of baseload capacity, of which 20,000 MW was lignite-fired, 15,500 MW coal-fired, and 12,100 MW nuclear. Baseload power prices that day were pegged at Eur 42.50/MWh, or roughly $55/MWh.

The amount of wind power used to cover the remaining demand that day was roughly 6,000 MW of wind, while 7,000 MW of solar was used for approximately the two peak hours. The peakload price of power that day was Eur 48.29, or $62.99/MWh.

A month later, all hell seemed to break loose, price-wise.

How it is affecting Germany's largest generator of electricity:

Last November the chairman of E.ON, the big German electricity and gas utility, told shareholders that his company’s gas-fired facilities had become “barely profitable,” and natural-gas fired power was being replaced by renewable sources, which, he noted, are fed into the grid as a priority when demand is highest.

The utility RWE has the most installed capacity of any generator in Germany, with 31,000 MW. Of that total 9,799 is fired by lignite, 9,555 MW by coal, and 5,228 MW by natural gas. RWE has just 313 MW of renewables.

Because the utilities are no longer profitable (or just barely) they cannot build more wind farms.

[US: "typical" home (not necessarily average), 1,000 kwh/month x 10 cents/kwh = $100/month.]