The impact of renewables on electricity prices in Germany – An estimation based on historic spot prices in the years 2011–2013

Marius Dillig, Manuel Jung and Jürgen Karl

Renewable and Sustainable Energy Reviews, 2016, vol. 57, issue C, 7-15

Abstract: Germany׳s public opinion and media usually attribute increasing electricity prices to the high share of renewables in the German power system. But average electricity prices at the European Energy Exchange dropped during the last years due to an excess of renewable energy. This study uses historic market data in order to quantify the effect of renewables on prices. Historic demand and supply curves from 2011 to 2013 have been used to reconstruct electricity prices under the assumption that no wind and PV would be available. The analysis reveals an astonishingly high increase of market prices up to 5.29ct/kWh due to a lack of non-renewable power capacities. In 2013 the available conventional capacity would not have been able to cover the demand during 269hours. The estimated maximum deficit of 5.6GW is in good agreement to data published by the German grid operators. The discussion of the origin of this deficit leads to the conclusion that the current situation has not been caused by renewables. The liberalization of the European energy market established investment risks that hindered required investment a long time before the renewables boomed.

Keywords: Energy economics; Renewable electricity; Merit order effect; Electricity market modeling; Generation capacity (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (48)

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DOI: 10.1016/j.rser.2015.12.003

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