• 1000

Sustainability has become a fundamental goal of business. Driven on the one hand by diverse regulatory requirements such as the Paris Climate Agreement, the COP initiatives and the German Climate Protection Act, as well as the demands of customers and investors, the market environment for companies is changing rapidly. The goal is clear: global warming must be limited and greenhouse gas emissions must be reduced.

With our facts page "Sustainability in figures" you can see at a glance which parameters currently apply. How much does electricity cost? How high is the share of renewable energies in Germany? At what price are CO2 certificates currently being traded?

Strompreis

Electricity prices -128.37 euros/MWh on average

The wholesale electricity price has been on a steady growth path in Germany for several months now. In September 2021, the traded hourly contract reached 237.01 euros/MWh, the highest German wholesale electricity price since the introduction of the Germany/Luxembourg market area. On average, the price in September 2021 was 128.37 euros/MWh, almost three times as high as in September of the previous year (43.69 euros/MWh).

Reasons for high electricity prices

Overall, the reason for the higher prices, as in previous months, is on the one hand the low amount of generation from renewable energies and on the other hand the high generation costs of conventional power plants. They include in particular the costs of fuel and CO2 certificates, both of which remain high and have a major influence on the wholesale electricity price.

Higher CO2 certificate prices can and should ensure on the electricity market that electricity from fossil energy sources, especially lignite and hard coal, becomes increasingly more expensive and, as a result, electricity production from them becomes less profitable. Accordingly, they should create an incentive to switch to more climate-friendly alternatives. Gas-fired power plants, for example, which emit less CO2 than coal-fired power plants, have correspondingly lower CO2 costs.

The aim is for gas-fired power plants to take the position of hard-coal-fired power plants and thus become the price-setting power plants on the wholesale market, a so-called "fuel switch". At the moment, however, the opposite effect is taking place. Due to the currently higher gas prices, the profitability of the gas-fired power plants has fallen and thus the competitiveness of the hard-coal-fired power plants has increased, despite the high costs for CO2 certificates. The cost advantage for CO2 certificates was eclipsed by the higher gas costs. This led to an increase in generation from hard coal and lignite, thus to higher CO2 certificate prices and consequently to higher electricity prices. On average last year, a certificate cost just under 25 euros, in January the price rose to over 33 euros and climbed to more than 52 euros in June. In September 2021, it will already be 63 euros, and the trend is still upwards.

In addition, after electricity consumption temporarily fell worldwide in the wake of the Corona pandemic, it is now returning to its previous level. Increasing electrification, which plays an important role on the path to climate neutrality, is also contributing to a rising electricity demand and consequently to an increasing demand for electricity. This rising electricity demand in turn causes a higher demand for fuels. In particular, the above-mentioned higher generation from hard coal in turn increases the demand for CO2 certificates and consequently their price. These factors influence the wholesale electricity price and in sum lead to the currently higher prices.

Power generation - 40.5TWh Power consumption 39.2TWh

Total electricity generation in September was 40.5 TWh. Compared to the same month last year (38.3 TWh), this is an increase of about 3 percent. The generation from renewable energies was 4.4 percent lower and that from conventional energy sources about 8 percent higher. The share of renewables in total generation was 36.9 per cent.

Electricity consumption in this month was 39.2 TWh. This is 1.1 per cent higher than in September 2020 (38.8 TWh).

Strompreis

Conventional generation

In conventional generation, which includes hard coal, lignite, natural gas, nuclear, pumped storage and other conventional energy sources, generation from hard coal in particular was higher. Compared to September 2020, a 58.2 per cent higher value was recorded. Electricity generation from lignite was 10.7 per cent higher, from other conventional by 16.7 per cent and from nuclear by 3.1 per cent. By contrast, generation from natural gas (-32.4 per cent) and pumped storage (-11.3 per cent) was significantly lower.

The generation of electricity from coal in Germany is to be phased out by the end of the calendar year 2038 at the latest. This was decided in the Bundestag and Bundesrat on 3 July 2020 with the passing of the Coal-fired Power Generation End Act (Kohleverstromungsbeendigungsgesetz, KVBG). By the end of 2022, coal-fired power generation with hard coal and lignite plants will be reduced from the approximately 40 gigawatts (GW) of coal-fired power plant capacity in 2020 to 15 gigawatts of remaining capacity each. By the end of 2030, further reductions to a capacity of eight gigawatts for hard coal plants and nine gigawatts for lignite plants are planned. This process continues until finally, in 2038, there will be no more electricity generation from hard coal and lignite plants.

Generation from renewable energies

Renewable energy sources in Germany include wind onshore plants, wind offshore plants, photovoltaic plants, biomass plants, hydropower plants and other renewables. Wind power, photovoltaics and biomass account for the largest share of electricity fed into the power grid from renewable energy sources. In H1 2021, 22.1 per cent of the total electricity fed into the grid came from wind power, 9.4 per cent from photovoltaics and 5.9 per cent from biogas. In total, 44.0 percent of the electricity fed into the grid in this period came from renewable energy sources. In contrast to other technologies such as biomass and hydropower plants, where electricity generation remains constant at the same level, the degree of utilisation for wind power and photovoltaic plants is subject to strong fluctuations in view of the changing weather conditions. In September 2021, for example, a maximum of 25.8 GWh was produced by onshore wind plants on one day, which accounted for just under 50 per cent of the total electricity produced from renewables on that day. Only two days later, the share of wind-onshore plants was only just under 17 percent.

In addition to other measures such as CO2 certificates and the CO2 price as an incentive to switch to climate-friendly energies, the Renewable Energy Sources Act (EEG) was introduced in 2000 as an instrument for promoting electricity from renewable sources. The goal is for 65 percent of gross electricity consumption to come from RE in 2030. Before 2050, all electricity generated or consumed in Germany is to be generated in a greenhouse gas-neutral manner. Part of this law is also the EEG levy, which finances the expansion of renewable energies. Operators of renewable energy systems that feed electricity into the public grid receive a fixed payment for this. This was 6.500 ct/kWh in 2021 and will be reduced to 3.723 ct/kWh from January 2022. Compared to the previous year, the EEG levy will fall by 43 percent.

Auctioning of emission allowances

The German auctions are held weekly on the spot market of the European Energy Exchange (EEX). In accordance with the requirements of the EU Auctioning Regulation, only half of the regular auction quantities were auctioned in August, with around 1.3 million emission allowances (EUAs) per date. At the auction on 10 September, the highest price since the start of German auctions in 2010 was achieved at 61.85 euros. In addition, the highest quarterly revenue since the start of sales/auctions in 2008 was achieved in the third quarter of 2021.

Emissionsberechtigungen

60.99€ average revenue per entitlement in September 2021

Emission allowances, also called certificates or EU Allowances (EUAs), have been tradable within the states participating in emissions trading since 2005. One EUA entitles the holder to emit one tonne of CO2 (carbon dioxide) or one CO2 equivalent (CO2e) in a given period.

Monthly heating oil price -72.4ct

In September 2021, the average consumer price (including VAT) for a litre of light heating oil was around 72.4 cents. This price in Germany has been subject to seasonal fluctuations since 2020.

Although the development of heating oil prices is dependent on the development of crude oil prices, it differs in some cases considerably across countries. This is due, among other things, to the composition of consumer prices for heating oil. The consumer price for light heating oil is made up of the product price, value-added tax, mineral oil tax and the contribution margin. The respective taxation varies in the different countries. In Germany there is also a north/south price differential.

Strompreis

Further Information

Your contact

Connect with us