Less dependent on gas
Renewable energies should reduce electricity prices
November 11, 2023, 9:46 a.m
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The expansion of renewable energy in Germany is not making as much progress as hoped. In doing so, it would ensure that the price of electricity generally falls, explains electricity market expert Huneke from Agora Energiewende. This is already clear on electricity exchanges.
According to experts, renewable energies will increasingly dampen electricity prices. “The more renewable energy systems with their low prices are in the electricity system, the less expensive wholesale gas power plants determine the electricity price,” said electricity market expert Fabian Huneke from the Agora Energiewende think tank. Renewables would already reduce future electricity prices.
“You can clearly see on the electricity exchange: the futures market prices are significantly lower for deliveries in a few years.” For example, if you currently pre-order electricity for the next year or the year after, the longer the delivery is, the lower the wholesale electricity price will be. “This can clearly be attributed to the influence of renewable energies, because the price of electricity is significantly below the development of fossil fuel prices or CO₂ prices.”
Huneke recalled another price-lowering effect: the abolition of the green electricity surcharge (EEG surcharge) last year. However, it was largely overshadowed by the rising electricity prices in the wake of the energy crisis. “Due to the price increases, we didn’t even notice the effect,” said the expert. The green electricity levy of 3.72 cents per kilowatt hour to promote renewable energies was reduced to zero on July 1, 2022 in order to relieve the burden on electricity customers.
Huneke also expects a price-increasing effect due to the rising prices Network fees for the electricity distribution networks at regional level. These strictly regulated usage fees for the lines are passed on to electricity consumers by the network operators via their electricity bills. “Electrification with the connection of electric cars and heat pumps, but also the increasing decentralized generation of electricity in solar and wind turbines, require a powerful infrastructure,” explained the expert. The energy transition requires an investment offensive in the networks.
In the first half of the year, the average electricity price for households was 46.27 cents per kilowatt hour, according to the energy industry association BDEW. Network fees accounted for around a fifth of this, 9.52 cents. According to the comparison portals Check24 and Verivox, network fees will rise by an average of eleven percent nationwide in the coming year. However, they will also decline in some federal states, for example in Brandenburg or Mecklenburg-Western Pomerania. The development of electricity prices this winter continues to be heavily dependent on the prices for natural gas, Huneke continued. When it comes to natural gas prices, it depends on how cold it gets and whether, for example, the nuclear power plants in France deliver more reliably than last winter.