Published on August 18th, 2013 | by Dr. Karl-Friedrich Lenz


3.1 GW Of Fossil Fuel Power Plants To Be Shut Down In Germany — No Longer Competitive

August 18th, 2013 by  

This article was originally published on Lenz Blog.

RWE has announced in their latest report on their first six months results (press release in German) that they plan to take 3.1 GW of fossil fuel generating capacity off the market.

The reason they give for that is that wholesale electricity prices are way down in Germany as a consequence of more renewable in the mix. They would be losing money if they needed to sell at these low prices. They don’t, since most of their business is fulfilling contracts from the past couple of years, which still have higher prices, but that effect will be gone soon.

Welt has an excellent article giving some background on this (in German).

They show an interesting graphic, which I hesitate to reproduce here for copyright reasons.

We learn from that: Prices have gone down from the mid term average of around EUR 55 a MWh to less than EUR 40. They estimate the minimum price necessary for gas generation as EUR 70, for coal as EUR 60, for lignite as EUR 45, and even for nuclear power after the plants have already paid back their investment as EUR 40, including a tax on nuclear fuel.

With prices below EUR 40 on the wholesale markets, operators like RWE may want to mothball their nuclear capacity even before they are required to do so by the 2011 law on the nuclear phase-out.

German Green Party Member of Parliament Hans-Josef Fell’s most recent mail newsletter has some very interesting comments on this development.

For one, he notes that this is great news. If RWE can’t even run fossil fuel power plants that have paid back their investment already at these low wholesale market prices, it follows that it doesn’t make any sense to start building new fossil fuel capacity now. Any new plant would need to earn back its capital cost, which is of course impossible.

He also notes how to deal with supply shortages. Under German law, the grid operators are legally liable to guarantee stability of supply. They will need to pay RWE or other owners of mothballed fossil fuel capacity for keeping their plants ready in case they are needed as backup on a windless November evening.

Image Credit: Coal power plant in Germany courtesy Shutterstock

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About the Author

is a professor of German and European Law at Aoyama Gakuin University in Tokyo, blogging since 2003 at Lenz Blog. A free PDF file of his global warming science fiction novel "Great News" is available here.

  • Green_Lightning

    Check out a private Canadian company offering shares. SHEC Energy boasts levelized costs of baseload solar power to be competitive with coal. That means coal can be eliminated anywhere the sun shines.

  • Kevin McGinnis

    So if 3.1 GW of fossil fuel generating capacity is eliminated, will solar power take its place? This is a substantial amount of energy and the end of the article makes a joke about the possibility of not having enough wind power.

    • Bob_Wallace

      Solar, wind and efficiency already took its place. That’s why it is no longer needed.

      You must have a different version that what I’m seeing. There’s no joke about not having enough wind power in mine. Just a simple recognition that until we add more renewables, storage, and transmission to the grid we will, at times, need to call on fossil fuels.

    • Ross

      The wholesale electric prices don’t lie. Deal with it.

      • tomandersen

        They also will not lie in 2014, when they spike, and cause the end of wind and solar in Germany.

  • Clive Dobson

    “before they are required to do so by the 2011 law on the nuclear phase-out.”

    is 2011 the correct date ? Thanks

    • Flying Goat

      That’s when the law was passed, not when it phases out nuclear power, I believe.

      • Matthias Krause

        Eight nuclear power plants have been shut down in 2011, the remaining five will be phased out. The last one is to close 2022.

        • tomandersen

          Lets go coal!

        • No way

          It’s just crazy… Don’t you care at all about human lifes and the environment in Germany?
          It’s a disgrace to not put an end to coal and oil before you even consider to take away any other energy source.
          The black sheeps of europe, I hope you stop the madness soon.

          • Bob_Wallace

            Madness is being stopped.

            Nuclear is shutting down. Coal use is dropping and will be eliminated. Germany’s lights are staying on.

            Germany is speeding toward being the sanest country in the world.

          • No way

            Madness is not being stopped. Coal use has been increasing in Germany and even if it was dropping it’s madness to not make it drop as fast as possible.
            There is no power source that even comes close to the danger and pollution that coal creates, the human lifes taken and the destroyment of the environment.

            I don’t mind if they want all renewables in the end but to not start with getting rid of the coal is idiotic.

            Nuclear is the least polluting energy source and the one that kills the least humans per kWh. Even if you are scared for emotional and unlogic reasons any idiot could see the advantage of getting rid of coal first.

          • Bob_Wallace

            Coal usage has gone up a bit. That’s temporary. As Germany’s new more efficient coal plants come on line and the old less efficient ones shut down coal use will decline.

            As more renewables come on line coal use will drop more.

            Perhaps if you lived next door to a reactor that melted down and then watched one of the most highly advanced countries melt a few you might decide that you’d prefer not to have a reactor in your back yard.

            German’s made the decision that they do not want to live with the danger of nuclear energy. And since they are ahead of most other countries in installing renewables I don’t think they are open to criticism by those who have done less.

          • No way

            Danger of nuclear energy? Coal is causing over 25 000 premature deaths in Europe, converted to whole human lifes that’s about 3 000 killed every year. Germany, Poland and Romania are causing half of that number.
            Not to mention all the respitory diseases and millions of lost workdays.

            “Coas usage has gone up a bit. That’s temporary.” And all the deaths that are caused by it? You make massmurder seem like a triviality.

            Japan had an extreme nature disaster which killed a lot of people. Zero of them because of nuclear power.

            Roof top solar power is more dangerous than nuclear power and actually kill more people per kWh.

            More than half of the Germans electricity comes from coal and it has been increasing by over 20% in the last two years. Less than a third comes from renewable sources.

            That is not a country caring about human lifes or the environment.

            Well, even if I was from another country I could still critizise them. What they are doing is like having a gun man on the streets á la Breivik (or rather 100 such gun men to make it more comparable to the lifes taken) and not take them down but rather focus their effort to follow an honest man to see if he maybe shoplifts.

            But as it happens I come from a country with about 65% renewables and close to 0 percent coal or oil or natural gas to generate electricity, so my criticism comes from those who have done a lot more.

          • Bob_Wallace

            You know, I’m not sure I’ve got the energy to carry on yet another round with a nuclear fanboy.

            Is coal evil? Yes.

            Is nuclear dangerous? Obviously.

            Is nuclear safer than solar or wind? Absolutely not. The death database for nuclear is faulty, it includes only deaths by fuel source. The death database for wind and solar includes deaths from non-fuel causes. No one in the wind industry has died from wind or sunshine. Several people in nuclear have died from radiation.

            Germany is in transition. They are in the process of eliminating coal and nuclear at the same time. Things will not happen immediately nor will the slopes be absolutely flat. Next year Germany will get less electricity from non-renewable sources and more from renewables. The year after will see even more from renewables. The year after that will see more from renewables. The year after will see even more from renewables. The year after will see even more from renewables. The year after will see even more from renewables. The year after will see even more from renewables.
            By 2050 Germany should be emitting no CO2 from electricity generation and have no nuclear on line.

            Why don’t you worry about those countries which are not working on the problem? How about railing about Russia?

            Or increasing the amount of wind power on your grid and start shutting down your nuclear before you spread your mistake over your neighbor’s property?

          • No way

            I’m absolutely not a nuclear fanboy. I’m a fanboy of eliminating deaths and pollution in the fastest way possible.

            The numbers are not faulty (don’t know what database you are using though). They include every death involved in nuclear power. From radiation deaths to construction deaths.

            And even if you add any imaginary extra death above that you will maybe surpass wind, maybe solar, but won’t get close to water power or even further up, biomass.

            I’m not saying that nuclear is 100% safe. But it’s in the close proximity of solar and wind no matter if you want to argue if it’s slightly less risky or slightly more risky.

            Germany has chosen a horrible way to get to all renewables, killing a lot of innocent people in the process. It’s good that they want to get there but the way there is horrible.

            This is an article on Germany and of course I worry about Russia or the US or Poland or Denmark or Romania or other countries like that who are not doing what they could to save lives and the environment. I even worry about the cleaner and more hard working countries and always wonder if they couldn’t do more.

            I worry about my own country too and one of the biggest areas to work on is the transportation sector and the petrol used in it. So far we have only 10% renewables in that sector but it’s increasing fast on many fronts with more energy efficient vehicules, electric cars, biogas (epecially for the city busses where the cities use their local compost materials to soon get them running on 100% renewables) and maybe most rapid change of them all, synthetic diesel from renewable sources which is booming. We are aiming as high as we can but still it will probably not reach 20% until 2016-2017 and 30% hopefully before 2020 but at least 2022.

            What’s so sad about Germany is that they are a rich, structured country, normally level headed and logical with a lot of engineers and technically educated people and should have been able to do this the right way (and they should have started it a long time ago but that’s too late to do anything about).

            We are building a lot of new wind power and just this week they started building an off shore wind park that single handedly will produce the equivallant of 10% of our total electricity generation today. Add that to the solar, other wind parks, upgraded water power, and energy efficiency savings.
            We could shut down a large part of our nuclear with that extra electricity but it’s better used being exported, reducing coal usage in neighbouring countries so that they can stop the ongoing spreading of their mistakes on their own and our property.
            Nuclear power isn’t a mistake, it has saved so many lives it should have gotten some kind of award or monument.

          • Bob_Wallace

            What database have you seen that includes construction deaths for nuclear?
            How inclusive is it? Does it include non-fuel worker deaths during operation? Does it include on site suicides? How about traffic accidents close to nuclear? If those deaths aren’t included then it can’t be compared to the wind and solar death databases.

          • No way

            Why on earth would you even consider on site suicides, traffic accidents close to nuclear or other things unrelated? Deaths during operation are only relevant if it’s not of natural causes but workplace accidents relevant to the operation. And of course workplace accidents when building it/taking it down/repairing it.
            One of the sources is the european commission reports including the ExternE, NewEx, and Secure using the Ensad database, the updated Ensad (which has an extensive addition to the nuclear section) and the Secure using different databases. Supposedly including everything from getting the fuel to disposing of it and everything in between.
            I have also seen the WHO reports, don’t know which database or what exactly they have/have not included.
            And many more reports all having the same conclusion with little difference between the results, including from highly rated german universities.

            I’m not afraid of learning new things so I would love to see anything you have to disprove what any serious report I’ve ever seen has said (as long as it’s from serious sources of course).

            And have you ever seen one that doesn’t show that coal power kills a lot more people than nuclear power?
            If you haven’t then tell me why anyone should ever chose alternative B over alternative A.

            Alternative A:
            Save as many lives as possible while getting renewables:
            1. Build as much renewables as possible. 2. Reduce the use of coal as much as possible. 3. Use as much nuclear as possible until the coal power is closed.

            Alternative B:
            Kill a lot of people by not reducing coal as much as possible:
            1. Build as much renewables as possible 2. Not reduce the use of coal as much as possible, maybe even stop the reduction or even add more coal. 3. Stop nuclear power.

            Any new coal power or old coal power not closed as fast as possible should result in the death penalty for the owner/government.
            (but don’t ask me to mess with the chinese and their coal power, I want to be on their good side when they have taken over the world and have people like me as attractions in zoos =)

          • Bob_Wallace

            “Why on earth would you even consider on site suicides, traffic accidents close to nuclear or other things unrelated?”

            Because those types of deaths are included in the wind death database that you are using.

            One of the wind deaths is a snowmobiler who drove into a wind farm fence. Some of the wind deaths are Chinese officials setting up for a presentation when a piece of display equipment fell on them. One wind death is someone who snuck on a wind farm and killed himself.

            Look, it’s not a coal or nuclear decision we’re making about our future. It’s neither. Both coal and nuclear are bad. In general I think we should close coal first, but if the people who live near reactors don’t want to do so any longer I have to respect their desires.

            I’ve lived downwind of a POS reactor. We were told that if we heard the sirens go off we should be 20 miles further away in 20 minutes. I now live downwind of where a reactor was built on an earthquake fault and in a tsunami zone. I have a little understanding of their decision.

            If you want to do something about coal, then work to get more renewables installed. Realistically the decision to keep or close nuclear will be mostly a financial one and out of our control. Five have perished this year in the US due to operational costs.

            And realize that if another reactor melts in the next few years then we will likely see massive reactor closing. The decision will be made by the people living closest to the reactors to close them. They will worry more about the lives of those closest to them as opposed to the lives of coal miners.

          • No way

            Even if you remove those unrelated deaths and add some to the nuclear if you want it still doesn’t make much difference. Have you ever seen a report that doesn’t show that nuclear is the safest or around the same levels as wind and solar?

            It is absolutely not about coal vs. nuclear. It’s about saving lives and the environment in my opinion. But neglecting to use nuclear as one of the options is the same as an approval of the killing. It’s like just standing and watching and letting the Nazis kill the people in the concentration camps (only difference is that the nazis killed about 1-2 million per year for 6 years while coal has and will kill 1 million per year for a long time to come).

            If you live close to a reactor it’s not that hard to move. Especially not if you live in the US where most reactors have been around for quite some while. I understand you better knowing you are from there since your nuclear plants generally are old, expensive and horrible kept.
            Of course they will care more about the lives of the ones closest to them. But the air pollution kill a lot of people including possible the ones close to you. Family and friends taken away from you by cancer and lung diseases.
            I live nearby a reactor too and I also worry. Well, when I’m in the bathroom or kitchen or in a car that is or doing other really dangerous stuff like that, not about the reactor of course.

            Hey, at least as long as you close some coal plants and build some renewables you are at least doing something even though you could do a lot more.
            But it’s really your problem. It won’t affect me unless I go travel there and breath the air. The winds won’t take it that far.
            I’ll keep working hard for my country and also try to stop nasty polluting and murdering countries nearby like Denmark, Germany, the UK and Poland which affect me, my family and my friends since the winds can travel so far.

            I guess one of the reasons you can look at Germany and seeing them doing some good (and not att the evil) is because it’s easy for you who don’t live nearby to see the effects of the rest of what they are doing.

          • Bob_Wallace

            “Even if you remove those unrelated deaths and add some to the nuclear if you want it still doesn’t make much difference. Have you ever seen a report that doesn’t show that nuclear is the safest or around the same levels as wind and solar?”

            If you take out all the deaths not caused by sunshine or moving air you end up with almost, well, zero deaths.

            We have no record, as far as I know, for all the people who have died during construction and operation of US nuclear plants. Two people died from falls in the last year in North America. One in the US and one in Canada.

            “If you live close to a reactor it’s not that hard to move.”

            Oh, horseshit. You’re suggesting the millions who live close to reactors just pack up and move somewhere else?

            I somewhat side with you. But you are so extreme that I really do not want to be affiliated with you.

          • No way

            You know that moving air and sunshine have killed millions? Not that is has much anything to do with wind and solar power.
            I know that you know that it doesn’t work that way, now you’re just trying to annoy me. =) To get the power from those sources people will die, and more so for the the same power from nuclear. But maybe we should blame the ground instead since it’s often the sudden stop against the ground that kills…

            I’m not suggesting that millions should move. If millions are against something then in a democracy it should be stopped. No matter how intelligent or stupid the idea is.

            Moving is an option if there is a few unrational and scared persons, and not millions of them.

            I’m sorry for coming across as extreme. I’m generally a calm and peaceful person. But I want us to go as fast as we can toward a better world and it’s really frustrating when people won’t go as fast or sometimes go at all.
            Especially when it’s countries who should know better. Germany could have been fossil free by now and rather helping their neighbour Poland to get there, instead they have painted themselves into a corner with little possibility to escape.

            *sigh*…you and me should be kicking some totally about the environment unaware or uninterested butts instead…

            And if you have a good idea on how to stop your use of coal, oil and that damn fracking then tell me and I’ll help you.

          • Bob_Wallace

            I really fail to see how Germany has painted itself in a corner.

            It has chosen to do eliminate two dangers at the same time rather than follow your path and do one first and then the other.

            Why isn’t Sweden helping Poland?

          • No way

            Go to and read the rest of the articles about die energiewende.

            There you can read about the 5.3 GW newly installed coal plants this year, the frustration of the people, the subsidaries and how the government should be able to pay it, how the rich (who have the money for investments) have installed solar and getting cheap power and the poor are paying for them puting them in economical crisis and much more…
            How a lot more coal plants are planned and how they don’t know if the infrastructure will hold…
            Google some other serious newspapers and you will see that it’s not really working the way they maybe hoped when rushing into this.

            Well, we have focused on helping Estonia, Latvia and Lithuania which have a population of 2/3 of the swedish population. We have helped them with a lot of projects in everything from power infrastructure, recycling to proper sewer systems. We have even helped finance their build up with our banksystem expanding (but that is profitable for us too of course but it has helped a lot). Soon are they even more advanced than us, estonia finished a fast charging grid for electric cars that covers the whole country with no more than 50 km between the stations, we are not even close to that.

            Poland is too big for us with more than 4 times our population. It would have been a perfect project for Germany. We do have a lot of clean tech projects in Poland though so they are using our know-how but it’s just normal business (which of course is helpful too but not in the “hey, we are here to help you fix your country. what do you need?”-kind of way).

          • No way

            (the banking almost ended in a fiasco because the people borrowed more than they really could afford and got them a small crash but they recovered fast and stoped using borrowed money to buy luxury cars now that they got “rich” fast 😉

          • Bob_Wallace

            Germany’s new coal burning plants are replacing (not adding to) the older plants that either have been or will soon be decommissioned. These new plants were planned and construction was started prior to the decision to close nuclear plants.

            By 2020, 18.5 gigawatts of coal power capacity will be decommissioned, whereas only 11.3 gigawatts will be newly installed.

            Furthermore those plants will be more efficient, releasing less CO2 per unit electricity produced than are the ones they are replacing. And the new coal plants are partially load-following.

            Germany gets its natural gas from Russia. It would be politically dangerous to build their fossil fuel component around an undependable supply. Furthermore their new coal plants are capable of load following to some extent, which will further reduce the amount of CO2 they produce.
            After Fukushima the citizens of Germany decided that they would accept slowing their reduction in CO2 in order to get nuclear reactors out of their backyards. They live next door to Chernobyl, they still experience the nuclear fallout.

            After seeing a technologically advanced country like Japan melt some down they decided that they did not wish to live with this danger any longer. Other European countries have made the same decision.

            Lacking a reliable source for natural gas and a lack of good long term storage technology, coal is a reliable backup for the German grid. As they determine the best storage for their needs and bring more renewables on line they will be able to use their coal plants less and less. And, as you can see from the title of this article, Germany now has an coal capacity excess of 3.1 GW which can be closed.

            BTW, Germany is still on track to be CO2 free by 2050.

          • No way

            *sigh*… you are hopless… how can you be so stone cold about the germans killing people? You don’t seem to grasp how many europeans Germany will kill by their actions.

            You are saying that they burn a shit load of coal and they will be burning a shit load of coal by building new power plants, just not as big shit load.

            Any new coal plant is a disgrace and a failure.

            I understand that coal is their only option with the path they have chosen but I can’t understand how they could chose such path of death and destruction.

            CO2 free by 2050. It’s not the CO2 I’m concerned about in their case, even though reducing the CO2 means that they are reducing the pollution too.
            They will probably get there even though they could have done it a lot faster.

            If it’s a net reduction by 3,1 GW as you say then it’s at least starting to go in the right direction and hopefully start reducing their use of coal instead of increasing it.

          • Bob_Wallace

            “*sigh*… you are hopless…”

            Thank you.

            And you are totally convinced that over the next 40 years or so none of the German reactors would have melted down had they decided to leave them on line.

            I can’t predict nuclear failure. Nor can I predict non-failure. The citizens of Germany have decided that both coal and nuclear are bad and they have chosen to shut their coal and nuclear plants simultaneously rather than sequentially.

            If that really bothers you then you should be complaining to the citizens of Germany. They didn’t ask my opinion.

          • A Real Libertarian

            You don’t seem to grasp how many more will die if Germany doesn’t act.

            Your plan is worthless for the simple reason it can’t possibly work without a literal old testament-style Jesus comes down from heaven-type miracle.

            “It’s like just standing and watching and letting the Nazis kill the people in the concentration camps”? NO, that’s you!

            We are the ones saying “He’s a monstrous totalitarian dictator, but he’s way better than Hitler, we ally with Stalin”. You’re the one watching the trains go by, and saying “it’s tragic and all, but allying with Stalin will kill people, and I refuse to kill people”.

            Refusing a great plan that will work in reality, in favor of a “perfect” plan that simply can’t work in reality, because you have principles, so sorry countless millions of innocents but your lives are worth so little compared to oh so precious principles, is not righteousness it’s SELF-righteousness.

            There are few things more disgusting then someone who when forced to chose between Bad and Worse chooses to nothing and thereby ensure Worse happens all the while declaring “I didn’t make a choice, so I’m better then you”.

            If you’re going to be a coward fine, but don’t you DARE put down those who did what was right, not what was easy.

          • Bob_Wallace

            No more Nazi stuff. We don’t go there.

          • A Real Libertarian


            P.S. Anyone who says Bob shows favoritism to those who agree with him. Note he only said “no Godwining” after some who agree with him continued on that line.

          • Bob_Wallace

            I try to keep the site from turning into a food fight.

            I have to slap my own wrist quite frequently.

          • A Real Libertarian

            So the one who watches the watchman is his internal watchman?

            You didn’t happen to have served in the Ankh-Morpork city watch by any chance did you?

            If yes, can you get me Sam Vimes autograph?

          • Ivor O’Connor

            You bring it upon yourself when you feed the trolls. That clown would have us drive at 55mph and would make it illegal to use ladders except by licensed contractors because in his mind it would be killing people not to.

  • JamesWimberley

    OP, citing Fell: “Under German law, the grid operators are legally liable to guarantee stability of supply. They will need to pay RWE or other owners of
    mothballed fossil fuel capacity for keeping their plants ready …“

    If that´s so, why does not a market for backup capacity not exist already?

    This prospect offers hope for the owners of mothballed gas generators, since they can be ramped up much quicker than coal or (I assume) nuclear.

    • tomandersen

      This press release is a message that they will downgrade stability, since the less stable the system the more money the backup generators get.

      Large industries sign contracts for power where they can be shut down if demand exceeds supply. This will happen more often. Then these large companies will simply unplug from the grid and make their own power. The result is a spiral to higher and higher prices for those left without a means to unplug.

      • Bob_Wallace

        “Then these large companies will simply unplug from the grid and make
        their own power. The result is a spiral to higher and higher prices for
        those left without a means to unplug.”

        That makes no sense.

        If large companies who now get much better rates drop off the grid that will mean that the price of electricity can be lowered for everyone else.

        • JonathanMaddox

          Exactly. Germany has insulated the biggest users entirely from the costs of the Energiewende — they pay wholesale prices only, which are *lower* than they once were.

  • tomandersen

    What a complete misunderstanding.

    The spot wholesale prices are low because the operators of thermal energy plants are doing the right thing – they have the capacity to run Germany for those times when renewable power is about 0 (low wind, low sun). This means that they can only get very low prices unless renewable energy output drops to zero, which is fairly rare. Electricity cannot be stored, so the thermal generators are always waiting for drops in renewable output.

    So they are issuing an ultimatum – they are shutting down backup generation capacity to the point where the price for power will spike when renewables are off, making them lots of money, while destroying German industry, which will have to turn off production when the electricity shortages start.

    This will be the end of renewable power in Germany. People have had enough. $0.60 per kWh delivered will kill many poor people.

    It will only be about 2 years before all this comes down on Germany.

    I know all the readers here know I am wrong, so come back to this story fall 2015, and tell me ‘told you so’.

    • Bob_Wallace

      “Electricity cannot be stored”

      We don’t need to wait until 2015 to figure out how wrong you are.

      Shall we make you a FUD sandwich for lunch?

      • tomandersen
        • Bob_Wallace

          We don’t have to wait because we know you’re posting crap, Tom.

          Your first “article” is simply false. ” Europe is beginning to realise that its green energy strategy is dying on the vine.”

          Yes, the recession that hit Europe has reduced the amount of money available for renewables, but that has only temporarily slowed renewables. The more that Europeans realize that renewables are saving them money the more they will push for more.

          Your second says that due to the rising cost of fossil fuels people are going to be spending more to heat their homes. I suppose you can’t make the intellectual jump to realizing that if renewables weren’t cutting their use of fossil fuels then heating costs would rise even more.

          Sorry, Tom. Your game is limp.

          • tomandersen

            Well as I said in my original post, this news will be scoffed at, so lets wait a couple of years. Spain is there now.

          • Bob_Wallace

            Spain is where now?

            In financial straights due to their own housing bubble and financial industry meltdown? Yes, they are.

            Cutting support for renewables due to their financial problems? Yes, they are.

            Enjoying cheaper electricity and avoiding spending money they don’t have for fossil fuels because they have a lot of installed wind and solar? Yes, they are.

          • tomandersen

            How does power at about triple the US rate, 50% higher than the rest of Europe make things enjoyable?

            How come Denmark and Germany – ‘leaders’ in renewables – have the highest prices? How come Bulgaria, NOT a leader in renewables, has the lowest power prices in Europe?

            Even at 0.25 Euro /kWh, as charged, the actual cost is higher – due to FIT subsidies – , and the government is not only stopping new renewable installs, they are clawing back money from them.


          • Dan Hue

            And everybody knows that Bulgaria is so much more prosperous than Germany and Denmark, not to mention environmentally conscious.

          • Bob_Wallace

            Solar on the grid reduced the wholesale price of electricity in Germany by approximately EUR 5 billion in 2012.


            Germany is saving EUR 8 billion a year in fossil fuel import costs right now.


            I’d enjoy paying less than more. YMMV.

            Yes, it will cost something up front to move off fossil fuels and onto renewables. The cost will be miniscule compared to the cost of continuing to burn fossil fuels.

          • Grad

            Germany and Denmark have very high taxes on electricity.

            Average cost of generation in Denmark is about 12-13cents/kWh, in Germany about 13-14cents/kWh, both is at about average EU generation cost, which is 13-14cents/kWh (this includes profits). The rest is taxes (that’s where you get 25cent/kWh or more).

            Different EU countries have (very) different taxes, so that can make quite a difference. But generation cost in Germany and Denmark doesn’t seem to be anything special.


          • Ross

            Bulgarian electricity prices are subject to price controls. The fossil fuel industry is getting a subsidy. Bulgaria has the least efficient electricity generation in Europe. Despite the usual FUD about grid stability Bulgaria is increasing its renewable energy. The EU paid them to shut down 3 old nuke plants and they messed up. They’ve been in one crisis or another for over 20 years.

          • jeffhre

            Bulgaria also happens to have the highest percentage new solar per capita and, total solar MW per dollar of GDP on planet earth. Is there a correlation?

          • Ivor O’Connor

            Goldman Sachs analysis released today concludes renewables in Spain are quickly putting an end to coal. Goldman Sachs says this is also happening in Germany, like this article states, and in Australia.

        • JonathanMaddox

          Is that the truth, or did you read it in the Murdoch press?

    • Ross

      That makes no sense. If the wholesale price goes up that will only encourage even more renewable power investments to bring it back down again.

    • Matthias Krause

      Tom, you have some valid points, but throwing around random numbers does help your case

      • Bob_Wallace

        Which of Tom’s points strike you as valid?

        • Matthias Krause

          Bob, the point is that the big four utilities in Germany (not just RWE) use the situation at the EEX to basically introduce a capacity market design through the back door by threatening to shut their plants down.Renewables broke the merit order system (which was foreseeable), but nobody cared to come up with a solution because most of the players totally underestimated how fast the problem would arise. The other point is that power in Germany is indeed getting more expensive and might be hiked up by the “EEG-Umlage” (the pot that finances the FIT) by about 5 to 6 cents per kWh by the end of the year which is hotly debated on the campaign trail (Merkel seeks reelection in September). It doesn’t hit the industry that hard because many companies are exempt, but it does hit the residential consumer all the harder. The rate of new solar installations in Germany has slowed down significantly since the beginning of the year (when the new FIT scheme started) and the market for big, utility scale solar plants is all but dead since the last overhaul of the EEG. The German government is about to kill the “Energiewende” with the argument of overbearing costs and the whole project is at a very critical point right now. Form the outside it might seem that “the Germans” know what they are doing with their “Energiewende”, unfortunately they are not. A master plan is still missing, but it would be so essential to manage the very tricky transition phase from a carbon to a non-carbon power market.

          • JonathanMaddox

            Can we seriously say “The German government is about to kill the Energiewende”? Right when it’s proven itself beyond doubt to be working? Adjusting, sure, by introducing capacity payments or removing the cap on the spot price for dispatchable power, but killing? Why?

          • Matthias Krause

            Many, not only politicians, don’t believe that it works. Too expensive, too dangerous (black outs), killing the economy, only helping China – you name it. The capacity of new solar installations will be down by at least 50% this year compared to last year, offshore wind has massive connection problems, not sure about the numbers for onshore wind. And never underestimate the power of the dirty energy lobbyists…

          • JonathanMaddox

            I understood that Germany spent roughly 8% of its GDP on renewable energy in 2012, the vast majority of which would have stayed in the country. Don’t underestimate the power of the clean energy lobbyists!

          • Bob_Wallace

            I don’t think the final numbers are out yet, but estimates are that the German GDP was $3.577 trillion in 2012.

            You’re claiming that Germany spent $286 billion on renewables in 2012?

          • JonathanMaddox
          • JonathanMaddox
  • Bob_Wallace

    Section 107 of the Copyright Act states:

    the fair use of a copyrighted work, including such use by reproduction in copies or phonorecords or by any other means specified by that section, for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research,is not an infringement of copyright.

    Since this is a US site and the purpose is news reporting and teaching I’ll post it.

    It’s pretty danged amazing. Especially since we have people continuously telling us how Germany is getting ruined by rising electricity prices caused by abandoning coal and nuclear generation and turning to inadequate wind and solar.

    • Dan Hue

      They need to keep saying it to continue believing it.

    • Bob_Wallace

      A bit of translation help:

      Gas generation: EUR 70
      Coal: EUR 60
      Lignite: EUR 45
      Paid off nuclear plants: EUR 40

    • tomandersen

      You show a graph of wholesale spot market energy prices. The real cost for energy should be in this graph, but it is not. The government pays about 400 Euro per MWh for green power. This is a graph displaying not prices, but market distortion.

      Consumer delivered prices in Germany are about 400 Euro per MWh.

      • Grad

        Rubbish. Consumer delivered prices (for households) in Germany are 26.8 cents/kWh, which is 268€ per MWh.

        Feed in tariff for solar in Germany is 18cents/kWh (for less than 1kWp systems), so there is very strong incentive for self consumption (because it is cheaper than grid).

        I’m from Europe and I don’t see any of this “pulling back on renewables”. The feed in tariffs are lowering every month, that’s true, but you know what: that’s because cost of renewables is going even more down.

        Short term storage (batteries) is the next big thing in the following years.

        • tomandersen

          268 in 2012, so I would guess about 300 now. Sorry.

          The FIT is only part of the cost of solar, as you still need to pay for backup and distribution.

          German rates are about 4 times the rate in most of the USA. The US has actually dropped carbon output, unlike Germany, as they are changing from coal to gas, while Germany does the opposite.

          If someone builds a battery that is grid scale and economical, it will help renewables for sure, but that’s a big IF.

          In the meantime, this story’s real source indicates that wholesale power prices will spike in times of low wind. The big thermal plants are tired of playing nice.

          • Bob_Wallace

            Germany does not have a domestic supply of natural gas. They are dependent on Russia and Russia has been known to use gas sales as a political weapon. That leaves Germany in the position of needing to use some coal while they install more renewables and storage to replace both coal and nuclear.

            Power from any generation source, including coal and nuclear, need backup and distribution.

            You can say that wholesale prices will spike in times of low wind, but if you look at it correctly you will see that prices sink when wind and solar are producing and return to fossil fuel production levels when they aren’t. If your argument had any validity then the wholesale price of German electricity would be rising.

            It really doesn’t matter how the big thermal plants feel about the game they’re in. They’re being shoved to the sidelines and being kicked off the team.

          • tomandersen

            What is happening is that the backup plant operators (thermal plants) are not getting paid enough to keep them running. So they will shut some down.

            I think that you agree with that statement. My apologies if that is not the case. Its the consequences of this step that we disagree on. I think it will mean the end of new renewable installations in Germany within a year or three, with clawbacks and ‘new rules’. Turbines will start to come down in a decade.

            You can’t store enough power to run Germany for a week in November with no wind or solar coming in. Even 12 hours can’t be done right now. (Battery storage is about $3000/kWh, assuming it can get to $300/kWh I get about $300 billion to buy the battery for half a day of use). So a week would be trillions.

            So unless some battery comes along that’s 100x cheaper than current, storage will not work. Germany will need thermal power.

          • Dan Hue

            Tom, rather than a war between traditional and renewable energy producers, what is more likely to happen is some sort of new arrangement where renewables are given the priority (per the merit order), and idle or mothballed thermal plants are still compensated for the backup security they provide. Germans are disciplined and they see the big picture. They are not likely to let the situation get out of hand. It’s clearly distressing to some people on this side of the pond.

          • Bob_Wallace

            “What is happening is that the backup plant operators (thermal plants)
            are not getting paid enough to keep them running. So they will shut some

            Exactly. The most expensive (least profitable) producers are closing. That means that the grid is not having to pay for their more expensive electricity.

            ” I think it will mean the end of new renewable installations in Germany within a year or three, with clawbacks and ‘new rules’. Turbines will start to come down in a decade.”

            I think you’re smoking loco weed.

            “You can’t store enough power to run Germany for a week in November with no wind or solar coming in.”

            There is no need to do so. Remember, Germany is not an island set thousands of miles from anywhere else. It is a country set among many others and somewhere the wind will blow, the Sun will shine, hydro will flow through turbines, geothermal will spin, biomass will make steam, biogas will power plants, and tides will ebb and flow.

            ” (Battery storage is about $3000/kWh, assuming it can get to $300/kWh I get about $300 billion to buy the battery for half a day of use).”

            EOS System zinc-air batteries are going on the grid at $160/kWh. Pump-up hydro is about 60% of that cost.

            “So unless some battery comes along that’s 100x cheaper than current, storage will not work. Germany will need thermal power”

            The goal is storage at $100/kWh. Starting with your $300/kWh that’s a 3x drop, not a 100x drop. And $160 is cheap enough, if that’s the best we can do we will be fine.

            We’re certain to have <$160/kWh storage since pump-up and vanadium redox flow batteries are already there.

          • tomandersen

            Last time I checked its dark everywhere at once. High pressure systems can cover Europe. In this weather, there needs to be a France or a battery. Right now France is 100x cheaper than a battery.

          • Bob_Wallace


          • agelbert
          • Nathanael

            What a ludicrous statement: when it’s dark in Europe it’s light in America, and vice versa.

          • JonathanMaddox

            The cheap battery is existing storage facilities currently dedicated to fossil fuels :


            You will point out that the round-trip efficiency of power-to-gas is low. This is known, and is beside the point. Storage will be required for at most a few weeks at a time when it’s cold, dark and still in the dead of winter, but in the meantime renewables are already delivering very low-cost power on sunny and breezy days. With overbuilt intermittent generators, excess off-peak energy will essentially be available at near-zero-cost as it would otherwise be “spilled” or curtailed.

            You will point out that costs are high. This is true, now. Costs will fall as the technology is developed, while the costs of fossil fuels go on increasing.

          • MikeSmith866

            Does Germany not have dams or reservoirs for pumped hydro to get you through the low months with no wind and no solar?

          • JonathanMaddox

            Nobody in Europe but Norway has large enough dams to be used for seasonal storage — Norway built them so it could have electricity through the dry months, but is increasingly using them to sell premium-priced power to Denmark (and soon the UK) when the wind isn’t blowing, while importing cheap excess wind power when it is. However even Norway doesn’t have the capacity to meet German winter power demands.

            German entrepreneurs and researchers are looking at using existing natural gas holding infrastructure for seasonal energy storage, as well as other technologies.

            Germany itself doesn’t have the topography for such dams (it had the world’s first power station and the world’s first pumped hydro power storage facility, but just doesn’t have any tall, narrow valleys from which it could conveniently remove the people). No neighbouring country could build a large enough dam to supply all Germany’s winter needs either, without flooding rare Alpine ecosystems, proud communities and major tourist attractions.

          • Bob_Wallace

            Don’t know how far things have gone, but Germany was looking at using abandoned mines for pump-up hydro storage.

            Then there’s the idea of creating storage “islands” in the ocean. Belgium and Denmark have worked on the concept.


          • JonathanMaddox

            The “island” quite resembles the concept of tidal power in some respects. People in low-lying counties of the UK concerned about sea-level rise are proposing this:


          • Bob_Wallace

            There are other purposals along that line. Build a tidal capture area and use the flow for generation.

            I wonder about this bit…

            “Conservationists and wildlife enthusiasts have vowed to fight the scheme arguing that it would cause considerable damage to an internationally recognised conservation site. During winter, the Wash provides a refuge for more than 350,000 wading birds and wildfowl of 16 significant species, including oyster catcher and curlew.”

            How might the damage arise?

            If the water flows thorough the turbines as it goes in and out the time of high and low tides might be a bit different. Retarded a bit.

            The amount of water flowing in and out should be the same.

            I suppose there’s a chance of silting/sanding in, but that should be at the lowest points and could be dredged.

          • JonathanMaddox

            I wonder the same thing. The idea is, precisely, to retard the tides, and to protect against major tidal surges, which surely can (and already do) do every bit as much damage as reducing the tidal volume possibly could. The entirety of the Wash is shallow sand and silt already; this is exactly why the migratory birds love it so much.

          • MikeSmith866

            Are you telling me that there are no places to construct dams in the Swiss or Austrian Alps?

          • JonathanMaddox

            The Swiss and Austrians aren’t enthusiastic, and Germans haven’t annexed either on a whim for, oh, 65 years.

          • Bob_Wallace

            The Swiss have multiple sites for pump-up. If the need arises they can market storage.


            Best to not get caught up in thinking of individual European countries as stand-alone grids. They are moving toward a large European grid with each country contributing what it has.

          • JonathanMaddox

            Thanks for that. I had no idea there were plans for new build of pumped hydro in Switzerland — I had read of protests in Austria.

            It’s not so much that Europe is moving towards an integrated transnational grid, as that it already has one by default and there’s not much individual countries can do about it. Generators in Poland and the Czech Republic have been heard complaining about Germany “dumping” cheap renewable power on their fragile markets!

            It’s a very good point about timing, by the by. Some existing operational pumped storage inside Germany (the world’s oldest plant still in operation, in fact) has become uneconomical to run as the old midday peak demand has mostly disappeared and the technical improvements allowing it to run more frequently are unprofitable, while some newer stations are earning more now that there are two distinct separate peaks on a sunny day.



          • Bob_Wallace

            It’s not Germany dumping renewables onto other countries. It’s power from further west passing through the German, Czech and Polish systems on its way to other countries.

            “Apparently the “surge” problem is not due to Germany pushing excess renewable generation on to its neighbors’ grids, but what problems there are result from market forces. Money, not wind.

            “Poland and the Czech Republic charge that surges in renewable power are becoming uncontrollable, but the researchers could not confirm these findings.

            On page 76, they note that loop flows with Poland exceeding 2.5 gigawatts only occurred in 2011, when wind power production was between four and eight gigawatts. And “significant loop flows of up to 2,000 megawatts” occurred when wind power production was “virtually negligible.”

            So what is the problem? The researchers found that prices are high when production is also great. The way the market is designed, power might then be imported from neighboring countries (such as Denmark) if import prices are lower. This power then hits a congested part of the grid and is rerouted along a path of lower resistance. This outcome is not infrequent but also not directly related to surges in wind or solar power production as charged.

            Once again, price – not technical capacity – is the culprit. A number of Eastern European countries had even proposed that Germany and Austria, which currently share a power trading platform, be split – a demand that the researchers take as a clear indication that the market’s design, not surges in renewable power, is causing loop flows.”

            This is from a very interesting multi-part piece on Germany’s role in Europe’s electricity system. The quoted bit above is from the third part.




            Those are not new plans for pump-up in Switzerland. They were 2005 (?) plans which were not completed. The point is that there are locations in Europe for pump-up if it is needed.

            As for the European grid, there is a new program called E-Highway 2050 which was established to build a robust European grid which is capable of dealing with moving electricity around the continent.


          • JonathanMaddox

            Great info. Thanks Bob.

          • Bernard Finucane

            The Swiss already store a lot of French nuclear power.

          • Bob_Wallace

            Right, they are also building up a nice inheritance for generations to follow.

            I’m sure people over the next several hundred years will enjoy the mess we’re leaving them.

          • MikeSmith866

            I don’t know why we don’t do this in Ontario. We have lots of nuclear power and we have Niagara Falls.

            It would seem that we could store surplus nuclear power with pumped hydro instead of selling to the US for almost nothing.

          • Nathanael

            Something important which you haven’t factored in: German power demands are *dropping* due to extremely high insulation standards.

          • agelbert

            A week in November with no wind or solar!!?

            Was that during the last ice age?


            Do you live inside a nuclear power plant in Germany?
            That’s one of the places there might not be any wind in November (minimum 5 to maximum 15 mph average in November).

            Now if you want low wind speeds over German land, you need to go to June, July and the first few days in August (but there’s still plenty of wind over the ocean!). Unfortunately for fossil-nukes like you, that just happens to be when there is a lot of Sunshine!

            Chart of the average daily minimum (red), maximum (green), and average (black) wind speed with percentile bands (inner band from 25th to 75th percentile, outer band from 10th to 90th percentile).


            Sorry. :>)

          • Nathanael

            “So unless some battery comes along that’s 100x cheaper than current,”
            This will happen soon.

          • Grad

            “The FIT is only part of the cost of solar, as you still need to pay for backup and distribution.”

            Do you think fossil fuels and nuclear don’t need reserves? What do you think happens when coal plant needs annual repairs or nuclear needs to replenish fuel? There are already built reserves for such occasions and Germany did not build a single additional reserve becase of wind and solar but it is using only existing reserves.

            “If someone builds a battery that is grid scale and economical, it will help renewables for sure, but that’s a big IF.”

            Actually, it’s not that big if. Since May 2013 there are financial incentives for storage in Germany (for households). I think that in about 2-3 years battery storage will become viable even without subsidies.

            Besides that, there are several power-to-gas projects up and running (they use cheap oversupply from wind and solar to create methane (it’s CO2 neutral process, because they take carbon from air). They then use methane as storage, as fuel and for heating. You can see here:

            It’s only a matter of time when they start closing coal plants. I think that will start happening in about 2-3 years, but we’ll see.

          • MikeSmith866

            I don’t think it is possible to build reserves to deal with the shut down of a nuclear reactor for 6 months for repairs or overhaul.

            You have to build excess capacity. e.g. if you figure that your reactors will be down 10% of the time for repair or overhaul, then you build an extra 10% of capacity to deal with this.

            My thinking of say pump-up storage is it helps you get through a peak week or peak month where you don’t have enough capacity to quite get you through.

          • Ross

            Tom just a reminder. This story is about closing down coal plants.

    • Matt

      In case you can’t guess the translation and are slow on the web. It is Sunday.

      Strompreis am Terminmarket und Wirtschaftlichkeitsgrenzen verschiedener Kraftwerkstypen – Electricity tariff at the Terminmarket and economy borders of different types of power station
      Steinkohle – hard coal
      Braunkohle – lignite, brown coal
      Atomkraft – nuclear energy

  • Omega Centauri

    Its a good/bad situation. We had been looking at the transition from the technically doable standpoint: It could be seamless, as fossil generation goes from baseline, to peaking, to occasional emergency use. But, we see the economics doesn’t support that gradual model, and at some point fossils -even as backup become nonviable. So we have to push forward plans for reliable renewables (demand response, longer distance transmission, storage, overcapacity …) much faster than anticipated.

    • Bob_Wallace

      We need to push renewables and storage for climatic reasons, but to the extent we don’t have enough renew/stor in place the market will pay whatever it takes to keep some fossil/nuke generation running.

      The cost of keeping fossil fuels on standby will make finances more attractive for storage.

      • Omega Centauri

        True. But, so far there is no evidence that money will be made available to keep those plants open. Maybe this will be an issue only geeks care/know about, then after a general blackout, all sorts of accusations will start flying?

        • Bob_Wallace

          I suspect all utility companies are required to keep ample backup power available. That’s part of the cost of running a company.

          • Ronald Brakels

            Generally speaking, whoever in charge of managing the grid will offer contracts to generators to maintain reserve capacity for grid balancing purposes. It is a small part of the total cost of supplying wholesale electricity, but an important one. In some places, in addition to this, they also have capacity payments where generators are paid to maintain capacity to meet demand if supply falls short. They have this in the state of Western Australia and it has resulted in the building of a mulit-million dollar gas plant that may never actually be used. The moral is, be wary of capacity payments and make sure the risk you are insuring against is worth the money you are spending.

          • Ronald Brakels

            I will add that technically capacity payments shouldn’t be necessary provided one doesn’t place a limit on how high the price of electricity can go. The draw back of this approach is that generators can attempt to game the system and take say 80% of their capacity offline when it is most needed so the price of electricity will fly sky high to maybe $50 a kilowatt-hour and they can make a fortune with the remaining 20% of their capacity.

  • Ross

    Cool if I’m reading that graph right it is Game Over for Fossil-Nuke in Germany. It’s just a matter of shutting them down as quickly as possible as renewable is brought on-line.

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