New study shows that renewable energies significantly reduce electricity prices
- Oct 4, 2022 9:22 pm GMT
Renewable energies are clearly having a price-dampening effect. This is shown by a study that we carried out on behalf of GP JOULE. If 20 GW of onshore wind power and 30 GW of solar power had been installed, the price per kilowatt hour on the day-ahead market in August 2022 would have been more than 8 cents lower. An average household would have had to spend around 130 euros less on electricity in the past twelve months. Read more about the study's key findings in the press release below.
Reussenkoge, September 29, 2022
Electricity prices have risen significantly in recent months. The reasons are varied, but the main ones are Russia's war in Ukraine and its impact on natural gas supplies, as well as the failures of French nuclear power plants. A megawatt hour cost a good 465 euros on the day-ahead market in Germany in August 2022. For comparison: a year ago, in September 2021, the price was around 128 euros.
GP JOULE therefore wanted to know: How would electricity prices have developed in Germany if more renewable energies had been available? The scenario: 20 GW of onshore wind energy and 30 GW of solar energy would be more installed and connected to the grid. What impact would that have on our electricity price?
Renewable energies reduce the price of electricity significantly
Between September 2021 and August 2022, the higher wind and solar power capacities would have meant that the electricity price would have been 12 to 24 percent lower on average per month. For the entire period between September 2021 and August 2022, this results in an average monthly price decrease of 37 euros per MWh or 17 percent.
"For a household with an annual consumption of 3,000 kWh, the savings potential is EUR 111 plus VAT," says the study (source: Energy Brainpool, 2022). In August 2022 alone, the price per kilowatt hour on the day-ahead market would have been more than 8 cents lower.
The additional generation of electricity from solar and wind energy would of course also be beneficial for climate protection: In the assumed scenario, electricity generation from solar systems increases by 30 TWh and from wind turbines by 43 TWh from September 2021 to August 2022. According to the study, this would replace around 8 TWh of electricity from natural gas, 15 TWh from lignite and 16 TWh from hard coal.
The authors of the study also write that "the effect on the entire economy is immense". Between 19.3 and 19.7 billion euros less would have had to be spent on electricity in Germany in the past twelve months if the 50 GW of additional solar and wind power had been installed.
Are renewables the way out of the electricity price crisis?
"The study clearly shows that renewable energies are the solution," says Ove Petersen, CEO and co-founder of GP JOULE: "The solution for permanently low energy prices, for security of supply, for independence and for containing the damage caused by us induced climate change will bring.”
The 20 GW of onshore wind energy and 30 GW of solar energy assumed in the study scenario would not have been unrealistic to achieve over the past few decades. On the contrary. According to the EEG 2023, 41 GW of solar and wind power capacity is to be added on land in Germany in 2024 alone, 55 GW in 2026 and 59 GW two years later.
"This means that if we now focus on the legally stipulated expansion path for renewables, we will solve the electricity market crisis by 2024 at the latest and will then have replaced gas and coal," says Petersen.
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