The impact of renewables on electricity prices in Germany - An update for the years 2014–2018

Sebastian Kolb, Marius Dillig, Thomas Plankenbühler and Jürgen Karl

Renewable and Sustainable Energy Reviews, 2020, vol. 134, issue C

Abstract: Increasing electricity prices for private consumers manifested the idea of price boosting renewable energy sources in Germany's public opinion. Literature however widely concurs that wind and photovoltaics have a reducing effect on spot market electricity prices. The underlying merit order effect led to historically low exchange prices in the past years. To quantify this effect, this study analyses historic demand and supply curves from the German day-ahead market to reconstruct electricity prices without the feed-in of wind and photovoltaics from 2014 to 2018. Results show that renewable energy sources considerably reduced electricity prices by between 2.89 ct/kWh in 2014 to 8.89 ct/kWh in 2017. This allowed German end-consumers to save a total of 40 billion € from 2014 to 2018. Additionally, wind and PV contributed significantly to security of supply. Demand could not have been met by domestic conventional and nuclear generation capacities in up to 424 hours in 2018. The study highlights the necessity to further speed-up the expansion of wind and photovoltaics.

Keywords: Merit order effect; Electricity price modelling; Energy economics; Renewable electricity; Renewable energy systems; Security of supply (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (12)

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DOI: 10.1016/j.rser.2020.110307

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