Senior decision-makers come together to connect around strategies and business trends affecting utilities.

Post

German energy market review July 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...

  • Member since 2018
  • 117 items added with 161,880 views
  • Aug 11, 2021
  • 464 views

Originally published here and co-authored by Sila Akat

 

The EU Commission has presented a new legislative package with more ambitious goals. The results of the coal and solar tenders have been announced. While the PV tenders were significantly oversubscribed, the bid volume for the coal tenders was not that high. New records were set on the short-term and futures markets.

 

“Fit for 55” - climate package: Europe's new climate targets

On July 14th, the EU Commission presented an extensive legislative package that sets the course for the new climate target. It contains drafts for twelve legislative procedures that are to be negotiated and adopted in the coming months. The aim is to reduce CO 2 emissions by 55 percent - instead of the previous 40 percent - compared to the reference year 1990 by 2030. The CO 2 price plays a key role in achieving this goal It is planned to lower the CO 2 upper limit in the European emissions trading system (EU ETS) and expand it to include ship transport and aviation (source: Montel). The target for the use of renewable energy by 2030 has been increased to 38 to 40 percent of gross energy consumption - previously the target was 32 percent (source: pv Magazine ).
You can read more details about the effects on European and national climate policy here .

Significantly oversubscribed PV tenders for open space and roof systems

Results of the PV tenders in the first and second segment (source: Energy Brainpool).

Figure 1: Results of the PV tenders in the first and second segment (source: Energy Brainpool).

In mid-June, the results of the first and second segments, both of which had their bidding dates on June 1, were published. Both segments were clearly oversubscribed.

In the first segment, bids from providers with ground-mounted systems larger than 750 kW can participate. A total of 242 bids with a volume of 1,130 MW were submitted. This means that the tendered amount of 510 MW has been doubled. 95 bids with a total output of 513 MW will be accepted. The award values ​​determined in the bidding process are between 4.69 ct / kWh and 5.69 ct / kWh. The volume-weighted average award value is 5 ct / kWh (source: Federal Network Agency ).

For the first time, tenders were also carried out for the second segment. Solar systems on buildings and noise barriers with an installed power greater than 300 kW can submit bids. 168 bids with a volume of 213 MW were received. With a tendered amount of 150 MW, these were also significantly oversubscribed. Only 114 bids with a volume of 152 MW could be accepted. The surcharge values ​​are between 5.35 ct / kWh and 7.89 ct / kWh. The volume-weighted average award value in the first round is 6.88 ct / kWh (source: Federal Network Agency ).

This year there is another technology-specific tender for each of the two photovoltaic segments. For ground-mounted systems, this will take place on November 1st, with a provisional volume of 509.52 MW. The next round of tenders for roof systems will again have a volume of 150 MW and will take place on December 1st (source: pv Magazine ).

Third round of coal tender easily signed

Results of the coal tenders (source: Energy Brainpool).

Figure 2: Results of the coal tenders (source: Energy Brainpool).

A quantity of 2,480 MW was put out to tender. Despite the large participation, these tenders were easily signed. In total, eleven bids were received with a total of 2,133 MW. It was thus possible for all bidders to win a bid. The bids varied between an output of 8.4 MW to 717 MW. The volume-weighted average award value is 102,799 euros per MW. As of December 31, 2022, only a maximum of 15 GW of hard coal and small-scale lignite plants are to be connected to the power grid in Germany and, despite easy signing, this target will most likely be achieved.

The quantities not purchased will be taken into account in the next round of tenders, which will take place on October 1st (source: Federal Network Agency ).

Frontjahr electricity reaches new record price

In July 2021, commodity prices initially fell until they rose towards the end of the month and then returned to the level at the beginning of the month. The front year contract for electricity approached a 13-year high at the end of the month with rising CO 2 prices. The contract almost reached the level on July 5 at EUR 75.60 / MWh - the highest Fronjahr price since 2008 (source: Montel ). After the EU Commission raised the CO 2 reduction target for 2030 in mid-July , there has been another sideways trend in EUA contracts. It is estimated that the CO 2 price will fluctuate between EUR 50 / t and EUR 60 / t in the following months (source: Montel). In addition to the front year of electricity, the front year of coal reached a ten-year high of USD 95.70 / t due to a lack of supply. (Source: Montel ).

There is movement and uncertainty on the oil market because OPEC + has agreed on an increase of 0.4 million bbl / day from August 2021. This increase is to be reassessed at the end of the year (source: Montel ).

The percentage price development of the commodities can be seen in Figure 3 (source: Montel ).

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 June to the end of July 2021 (source: Montel).

Figure 3: Percentage price development of the German power front year (candle sticks), the CO 2 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 of the front year coal (yellow line) from the beginning of June to the end of July 2021 (source: Montel).

High prices and negative prices on the German short-term market

The share of renewables in electricity generation was 48.9 percent in June, at the same level as in the previous month, but 5 percent below the value in the previous year. The net amount of electricity generated from renewable energy sources was just under 19 TWh in July.

On July 4th, the generation of wind and solar collapsed unexpectedly and the wind feed-in was 8.8 GW below the norm. This led to a record increase in the day-ahead price. The base load rose to a 13-year high of 109.04 EUR / MWh, the peak load was 118.12 EUR / MWh. (Source: Montel ). In contrast, the solar feed-in reached around 27.4 GW on July 19, ie around 6.7 GW above the norm. As a result, the electricity prices on the day-ahead market slipped into the red and fell by as much as -5 EUR / MWh (source: Montel ).

Figure 4 (source: Energy Charts ) shows electricity generation and consumption in July 2021.

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

Figure 4: Electricity generation and consumption in June 2021 in Germany (source: Energy Charts).

What happened in the energy market in June 2021? You can find the previous blog post here.

Discussions

No discussions yet. Start a discussion below.

Simon Goess's picture
Thank Simon for the Post!
Energy Central contributors share their experience and insights for the benefit of other Members (like you). Please show them your appreciation by leaving a comment, 'liking' this post, or following this Member.
More posts from this member

Get Published - Build a Following

The Energy Central Power Industry Network is based on one core idea - power industry professionals helping each other and advancing the industry by sharing and learning from each other.

If you have an experience or insight to share or have learned something from a conference or seminar, your peers and colleagues on Energy Central want to hear about it. It's also easy to share a link to an article you've liked or an industry resource that you think would be helpful.

                 Learn more about posting on Energy Central »