Monday, March 21, 2011

Electricity Cost Inflation in Europe

Here we go ...
In the week since Germany pulled capacity the long-term purchases have spiked over five $Euro/MWh ... and rates are not only rising in Britain, they are rising on dirty, dirty coal contracts.

"Profit from using coal to generate power in the U.K. for next winter, the six months from October, rose 7 percent to 14.67 pounds ($23.56) a megawatt-hour in London. That’s the highest level since at least October 2009, when Bloomberg started compiling the data. The profit, known as a clean dark spread, soared as electricity tracked natural gas, making it more favorable to burn coal in power stations. Gas rose on speculation it would be used to replace nuclear generation.
U.K. Coal Plant Profits Increase as Natural Gas May Go to Japan - Bloomberg
Not only has coal's share of generation gone up recently, the price spikes being seen are also probably related to the UK's sudden hasty repeat on solar subsidies.

In Germany, the utilities that own the idled reactors are finding their profits might actually rise as lower supply rises prices.
"Following the government's decision to shut down reactors, German power prices for delivery in 2012 and 2013 rose by up to €5 per megawatt-hour compared with the level before the crisis in Japan."

Meanwhile they can refocus wind projects back to doing what wind projects do, which is grab larger subsidies as they put off competing by ... competing.