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German Energy market review August 2021

Simon Goess's picture
Co-founder cr.hub

Simon Göß studied Environmental and Resource Management (B. Sc.) at the Brandenburg University of Technology Cottbus and Sustainable Energy Technology (M. Sc. Honours) at the Delft University of...

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Co-authored by Sila Akat, originally published here.

The results of the innovation tenders of the third tendering round were published in August. The federal government receives record revenues from emissions trading. The starting shot has been given for the first round of tenders for the fast charging stations. New record prices on both the short-term and the futures markets.

 

The number of tenders was reduced in the innovation tenders

As with the innovation tenders that took place on April 1st, only system combinations could participate in this tendering round, ie renewable energy systems with at least two different generation technologies. All bids were only for combined photovoltaic storage power plants. A total volume of 250 MW was put out to tender. Six bids were excluded due to formal errors. Even without these exclusions, the round was signed and the total amount was reduced due to the statutory volume control. The statutory volume control stipulates that, when signed, only bids up to 80 percent of the bid amount of the permitted bids are reached or exceeded and can participate in the tender. Ultimately, only 16 of 23 offers with a volume of 156 MW were accepted. (Source:Montel ).

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The average volume-weighted award value in this tendering round was 4.55 ct / kWh, higher than last time at 4.29 ct / kWh. Accordingly, the lowest bid value (3.99 ct / kWh) and the highest bid value that was still awarded (5.48 ct / kWh) were higher than in the previous round (source: pv-magazine ).

Results of the third innovation tenders (source: Energy Brainpool).

Figure 1: Results of the third innovation tenders (source: Energy Brainpool).

 

High CO2 prices trigger record revenues from emissions trading

Due to the constant rise in the CO 2 price, the federal government receives record revenues from emissions trading. The auction proceeds flow entirely into the so-called Energy and Climate Fund (EKF). The EKF is intended to finance climate protection measures. In the first half of 2021, sales were EUR 2.4 billion. This means that the annual total for 2020 of almost 2.7 billion euros will soon be exceeded. The previous record income of 3.2 billion euros in 2019 will also be exceeded this year, according to the emissions trading office. Figure 2 clearly shows the rapid rise in CO 2 prices compared to previous years (source: DEHSt ).

Annual revenues and development of the volume-weighted average price in the 3rd and 4th trading period of the European greenhouse gas emissions trading system (source: Energy Brainpool).

Figure 2: Annual revenues and development of the volume-weighted average price in the 3rd and 4th trading period of the European greenhouse gas emissions trading system (source: Energy Brainpool).

Even higher revenues are expected from national emissions trading. Since the beginning of the year, 25 EUR / t CO 2 are due for fuels, heating oil and gas . The CO 2 price will be increased to EUR 55 / t by 2025 . The Federal Ministry of Finance expects revenues of a good 7.4 billion euros for 2021 (source: Tagesschau ).

 

Germany wants to rapidly expand the charging infrastructure

The first round of tenders for the expansion of the charging infrastructure in Germany was opened. The Federal Ministry of Transport and Digital Infrastructure (BMVI) has put out to tender around 1000 fast-charging locations with at least 150 kW by 2023 to improve the infrastructure of medium and long-haul traffic. Around 2 billion euros are available for this. The invitation to tender takes place in two partial tenders. In the first part, motorway lots are advertised. That is around 150 to 200 locations on the federal motorways, which are divided into four to five lots. In the second part, regional lots are advertised. Here bidders have to find suitable locations within approx. 900 search areas of the 23 regional lots. These search areas give a specific area, e.g. B. around a traffic junction. InFigure 3 shows the regions (source: BMVI ).

Germany network with the regions, lots and search areas (source: National Control Center for Charging Infrastructure).

Figure 3: Germany network with the regions, lots and search areas (source: National Control Center for Charging Infrastructure).

In addition, it was announced in mid-August that the Federal Ministry of Transport and Digital Infrastructure will provide a total of 500 million euros by 2025 for the further development of the public charging infrastructure in Germany. The aim is to set up 50,000 charging points, around half of which will be fast charging stations. From August 31, 2021 to January 18, 2022, companies, cities and municipalities, public institutions and private individuals can submit funding applications and receive reimbursement of up to 60 percent of the eligible costs (source: BMVI ).

 

Gas price mixes up the futures market properly

At USD 150.50 / t, the price of coal had reached its 13-year high before it followed an abrupt fall in gas prices. The price of coal is currently rising again. It is supported by a low supply, sustained demand and rising gas prices. Due to the low inventory levels and feared delivery difficulties, the gas price is rising steadily (source: Montel ). Its course also has an impact on the front year electricity and on the EUA lead contract. Towards the end of the month, the CO 2 price reached an all-time high of EUR 59.85 / t. The electricity price reacts to these developments and shows a tendency to increase (source: Montel ). The percentage price development of the commodities can be seen in Figure 4 .

Percentage price development of the German power front year (candle sticks), the CO2 certificates with delivery December 2022 (red line), the oil type Brent with delivery in December 2021 (orange line), the front year gas at the TTF (green line) and the front year coal ( yellow line) from the beginning of July to the end of August 2021 (source: Montel).

Figure 4: Percentage price development of the German power front year (candle sticks), the CO2 certificates with delivery December 2022 (red line), the oil type Brent with delivery in December 2021 (orange line), the front year gas at the TTF (green line) and the Front year coal (yellow line) from the beginning of July to the end of August 2021 (source: Montel).

 

Few hours of sunshine and a lot of rain

August was characterized by cool temperatures and little sun. The number of hours of sunshine was 30 percent below the previous year's value (source: Montel ). The average share of renewable energies in electricity generation in Germany was 52.80 percent, which is both above the annual average and five percentage points above the previous year's value (source: Energy Charts ).

There were new records on the short-term markets. The Cal 22 rose to an intraday high of EUR 86.90 / MWh. This is the highest level since June 2008. The front month even rose to an all-time high of 102 EUR / MWh. The prices are supported by high fuel prices and lower wind feed-in (source: Montel ). In Figure 5   , the power generation and consumption are presented in June 2021st

Electricity generation and consumption in Germany in August 2021 (source: Energy Charts).

Figure 5: Electricity generation and consumption in Germany in August 2021 (source: Energy Charts).

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