Why Germany gives away electricity – and then buys it back at a high price

2023-11-07 23:03:37

The FDP’s billing for green electricity was hidden, but it had a lot to offer. Recently, parliamentary group leader Christian Dürr presented a list of demands for a national energy strategy that addressed the “pitfalls of a one-sided all-electric strategy.” It is true that it is right to expand renewable energies, but this must be done with a sense of proportion and on the basis of fair calculations.

In order to assess the competitiveness of wind and solar systems, it is not the economic costs used by their advocates that are crucial, but rather the economic system costs. These would have to take into account the expenses for reserve power plants and storage, for network expansion and network control. Because of the “inflexibility” of green electricity, its system costs are particularly high, argues Dürr.

In fact, green electricity depends on the weather and time of day, it cannot be stored adequately, and it needs intelligent distribution and more transmission networks, as generation often does not take place where the electricity is needed. On windless and cloudy days or at night, either adjustable gas and coal heaters step in, or Germany has to introduce electricity.

Since the last nuclear power plants were shut down in mid-April, Germany has been importing more electricity than it exports. The electricity often comes from countries that continue to rely on nuclear and coal power, store energy behind dams or whose renewables can be regulated, such as hydropower in Austria.

Germany is paying millions to dispose of green electricity

The lack of controllability in Germany also takes its toll on sunny and windy days, when renewables actually have their moment. Then they produce a lot of electricity at low cost. And sometimes this is so excessive that the systems have to be shut down in exchange for compensation and the excessive amounts of electricity have to be delivered abroad in order not to overload the network. The export then takes place at low prices, in some cases the surplus electricity is even given away, and sometimes Germany has to pay a purchase fee, which is euphemistically called “negative prices”.

“The inflexibility of renewable energies means that excess German electricity is purchased and stored by Switzerland and Austria, among others,” writes Dürr, referring to the pumped storage power plants. “Germany pays an acceptance fee for this. On days with little wind, Germany buys this electricity back at high prices. The ‘disposal’ of green electricity costs taxpayers dearly.”

However, this does not apply to producers, criticizes Dürr. You receive compensation for switching off and only feel negative prices if they last for several hours. According to the Federal Network Agency, compensation payments amounted to almost 44 million euros in 2013, and in 2022 they were already 900 million. Consumers pay for this through network charges. Overall, network congestion management costs 4.2 billion euros per year, Dürr calculates. “The shutdown of the systems is not controlled by the market, but rather by planned economy,” he sums up and demands: “This compensation should be eliminated in the future.”