Fri Jan 20, 2012, 08:41 PM
jpak (30,587 posts)
Solar surge hurts coal, deepens Merkel's puzzle (Germany)
Last edited Fri Jan 20, 2012, 09:19 PM - Edit history (1)
Germany is installing so many solar panels that profits at coal-fired power stations run by EON AG and RWE AG may slide more than 40 percent by the middle of 2012.
The country, Europe’s biggest electricity market, installed a record 3,000 megawatts of new panels in December, the Bonn- based Bundesnetzagentur, the network regulator, said this month. The prospect of a glut of power may drive the margin from burning coal to generate electricity, the so-called clean-dark spread, as low as 5 euros ($6.43) a megawatt hour by July, according to UBS AG. It was at 8.70 euros at 8:15 p.m. in Berlin Wednesday, data compiled by Bloomberg show.
"There is not much overcapacity yet, but it will get worse as there is a lot of new supply coming," Patrick Hummel, an analyst at UBS in Zurich who has covered German energy for more than 10 years, said by e-mail on Jan. 16. Germany may be oversupplied for at least five years, according to the bank.
Operators of coal and gas plants including EON and RWE lose a combined 300 million euros in pretax earnings per year, based on current installed solar capacity cutting operating hours at fossil-burning plants, according to Hummel.
4 replies, 1004 views
Solar surge hurts coal, deepens Merkel's puzzle (Germany) (Original post)
Response to jpak (Original post)
Sat Jan 21, 2012, 12:16 AM
Yo_Mama (7,763 posts)
1. This Spiegel article raises a question on that.
Solar farm operators and homeowners with solar panels received more than €8 billion ($10.2 billion) in subsidies in 2011, but contributed only three percent of the country's total energy supply. The future of renewable energy is a major issue in Germany, where the government announced earlier this year that it would be phasing out its nuclear energy program.
Under Germany's renewable energy law, each new energy system qualifies for 20 years of subsidies. A flood of new solar farm operators and private users have pushed up the costs of those subsidies, opponents argue, passing the costs of the government support on to all electricity consumers nationwide.
It's hard to see how this would cause a problem with coal right now, especially since demand on many coal plants has risen after the nuclear shutdowns, and since more shutdowns are impending.
Solar in much of Germany isn't all that productive. I can see how the need to ramp coal plants down when solar feed-in rises at peaks could make coal plants less productive and thus raise taxes -they are not designed to do that. But in the long run it will be the consumer who must pay the cost, because Germany is way behind in their energy program and they have a difficult situation. So they can't get rid of the coal plants. And in the long run, you have to pay to keep those resources operating. Still, since solar is generally more easily predicted, I suspect most of the issue comes from northern wind.
I found an article explaining some of the situation with the eastern grid:
The short summary is that they are maintaining grid stability by shoving it over the border, even though the power is needed in the south. It's a very frustrating situation.
Germany hasn't tied in the North Sea projects yet, they don't seem to be making progress on the north-south lines, the Poles and the Czechs are threatening to block the electricity surges at the border with special transformers, and so it goes.
Until the Germans get their asses in gear, they are going to have an increasingly unstable situation. They do have a plan, but they aren't executing it, and if they dawdle too much longer the funding for those North Sea projects is going to evaporate.
The additional NG plants aren't going up yet as far as I can find out, which means that in practice in the winter they have to use the older coal plants. The feed-in tariffs for solar power have to be paid, plus the increased cost on the compensating power had to be paid, and in the end it WILL be paid.
A lot of this is fighting over rates and money. BNetzA's monitoring report covers some of the delays and problems:
Response to Yo_Mama (Reply #1)
Sun Jan 22, 2012, 12:45 AM
Fledermaus (1,506 posts)
3. German Solar Output Increases by 60% in 2011
Just weeks after the solar industry installed the one millionth system in Germany, the country's solar trade association announced that the technology accounted for three percent of total energy generation in 2011 — increasing 60 percent over 2010 to 18.6 terawatt-hours (18.6 billion kilowatt-hours).
This follows data released last week showing that renewable energy accounted for 19.9 percent of electricity production in the country in 2011, growing 16.4 percent over 2010. Meanwhile, overall energy use in the country fell 4.8 percent due to warmer temperatures and increasing efficiency efforts, further boosting the value of solar generation.
Response to Fledermaus (Reply #3)
Sun Jan 22, 2012, 12:14 PM
NickB79 (12,850 posts)
4. When you start with very small number, it's not hard to increase rapidly in one year
As the article says, even with the 60% jump solar is still only 3% of Germany's total energy generation.
Response to jpak (Original post)
Sat Jan 21, 2012, 06:15 PM
txlibdem (6,183 posts)
2. The Germans were pioneers in widespread solar PV implementation
When you're paving the way for the rest of the world, sometimes you get it right and sometimes you don't. They (IMO) must accept the learning curve that goes along with being a pioneer. Call it growing pains or whatever you like but the Germans are doing something that no other nation has the balls to do right now.
They are also contracting for solar power from North Africa. This is a good idea as well. Perhaps they could have put all their subsidy money into that but who knows, with global climate change Germany may be quite sunny by 2035.