Wednesday, March 12, 2014

Are Bavarian EEG Demands threatening Germany's Energy Transition?

This, regarding the energiewende progressing, is interesting

"...Bavaria in particular demands a cap on the EEG surcharge with which consumers pay for the difference between the feed-in tariffs paid pursuant to the EEG for renewable energy and the sale of the energy at the EPEX Spot power exchange by the transmission system operators (TSOs). Once the cap is reached, the Bavarian government wants to put a stop to the promotion of renewable energy...
The EEG surcharge currently amounts to 6.24 ct/kWh. A cap at around 8 ct/kWh should be discussed, Bavarian Prime Minister, Horst Seehofer (CSU) told the paper..." 
This is a little rich coming from Bavaria.  The Texas of Germany's states is the largest net beneficiary of the country's renewable energy scheming.

Regardless, my suspicion is the 8 ct/kWh may be reached even if no more renewables are built - the reason being what I've called The Capacity Trap; the solar and wind production in Germany has essentially no capacity value - meaning there is no expectation it will be generating significant power at peak demand periods (winter evenings).

The ratio isn't 1:1, but basically the more production from no capacity value renewables, the lower the utilization rates of plants with capacity value (often coal or gas).  Germany has not yet figured out how to keep the capacity value in service.

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