02.04.2013
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Electricity trading

German power exports more valuable than its imports

Now that the switch to renewables has not produced blackouts, but record power exports, the new conventional wisdom has it that German ratepayers are subsidizing electricity sold on the cheap to neighboring countries. Why doesn't anyone just do the math?

The new official figures published today by DeStatis basically confirm the preliminary statistics published by BDEW at the beginning of the year, which put Germany's net power exports at a record level – an outcome that flies in the face of concerns that the sudden nuclear phaseout of 2011 would lead to a shortfall of power generation.

Now, the German press is full of reports charging that German ratepayers are having to subsidize energy that is given away practically for free to neighboring countries. RP online writes of the "paradoxical situation" in which "German power providers have to pay for the power they export just to get rid of it so it can be consumed where it is not really needed."

 - Worried about the German energy transition? Why not just do the math?
Worried about the German energy transition? Why not just do the math?
Martin Günther | pixelio.de

As regular readers of Renewables International know, regular readers of Der Spiegel are particularly misinformed, so it comes as no surprise that the five visible comments under Spiegel's article largely assume that Germans are subsidizing cheap power for foreign countries. The third comment reads, "It would be interesting to know how much foreign countries pay for German power and how much Germany pays for foreign power."

The stupid thing is that all of this is provided in DeStatis’ press report from today, but no article I could find (RP online, Der Spiegel, Frankfurter Rundschau, etc.) bothers to do the math on the statistics published. So here it is:

  TWh Billion euros Price per kWh in cents
German power exports 66.6 3.7 5.6
German power imports 43.8 2.3 5.25

This is not rocket science; it's basic math. On average, Germany received 5.6 cents and paid 5.25 cents per kilowatt-hour exported/imported, respectively. In other words, the value of the kilowatt-hour Germany exports is more than the value it imports – exactly the opposite of what everyone seems to expect.

The explanation is not hard to find either. A recent study produced by Germany's Institute of Applied Ecology (I summarized the findings in a four-part series starting here) found that it is in fact France, not Germany, that exports power at low prices at times of low power demand – so that its large fleet of nuclear plants do not have to be ramped down. Germany is the country that exports more power as demand in neighboring countries rises. (Craig Morris)

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8 Comments on "German power exports more valuable than its imports "

  1. heinbloed - 09.04.2013, 11:38 Uhr (Report comment)

    The Volksfreund has reported on the issue !
    02-04-2013
    http://www.volksfreund.de/nachrichten/welt/geld/boerse/Nachrichten-Trotz-Atomwende-Deutschland-steigert-Stromexportart55,3484598
    click onto " Stromfluesse der letzten Jahre"

  2. jmdesp - 04.04.2013, 23:54 Uhr (Report comment)

    Well this is the data for 2012, but it's obvious from the Fraunhofer real time report that 2013 will be different : a real lot of export, almost no import, it's guaranteed Germany will be Europe's n°1 net exporter in 2013, but at a very low price for the exports so that when calculating the net profit it's very likely France will still be on top. This year, it's Germany more than France that exports at very low price in order not to ramp down.
    I think what made 2012 a good year for the German exports was mostly February. There's no data on the price at which those 13,2 TWh were sold to France, but it certainly was very expensive, as almost every Watt of it was during the coldest hours of February when power was scarcest in the year. In regard to that, an average price of 56€/MWh is not so good anymore. Having to pay to export did happen during the Christmas week, it didn't have a significant impact over the operation for the whole year, but the low prices will have more impact this year.
    I don't know if it's feasible from the EPEX spot data and the Fraunhofer report, to get a valid estimation of the average export price, but it'd certainly be interesting to try (the reason why I have my doubts is that a lot of the electricity is not sold at the EPEX spot price, but on longer term contract. So if they are cross-border export contract, the value will be skewed).

  3. Wolf Lammen - 03.04.2013, 12:23 Uhr (Report comment)

    Hello, I am afraid, the math is not as simple as you describe it. While it is obviously an advantage to sell the same amount of goods at a higher price than you bought them, you might still be on the looser side, if the amounts differ. Assume both prices are dumping prices, then any goods sold create losses. Some of these losses are compensated for by cheap imports, but in total, this might not be sufficient. I think, the mentioned press articles indicate that very situation: any kWh sold from a renewable source, is paid for in the order of ~ 8 - 20 ct/kWh, and if you only sell from these sources, you are in fact bad off. This does not mean, I think, these press articles are right, because it is unclear, where the sold electicity comes from, and conventional power sources receive subsidies as well, but you need a more elaborate reasoning to rebut them.
    Cheers Wolf

  4. photomofo - 02.04.2013, 00:03 Uhr (Report comment)

    Good article.

  5. Craig Morris - 02.04.2013, 23:15 Uhr (Report comment)

    Thanks, everyone -- the numbers did indeed, get crosse. I have corrected the text -- and my main statement still stands!

  6. Peter Segaar / www.polderpv.nl - 02.04.2013, 21:42 Uhr (Report comment)

    I just "was sending" the author a verbose explanation that apparently he used the wrong number relating with the imports, before I saw the post by andi.
    I agree with andi about that error, although the result remains the same, though at a much lower level...
    Number cracking requires close attention. Double-checking calculations is a necessity.
    But we are all human, and we all make mistakes (yes, me too, of course...). No problem with that, if the results are corrected once they have been discovered.

  7. Peter Segaar / www.polderpv.nl - 02.04.2013, 21:36 Uhr (Report comment)

    I just "was sending" the author a verbose explanation that apparently he used the wrong number relating with the imports, before I saw the post by andi.
    I agree with andi about that error, although the result remains the same, though at a much lower level...
    Number cracking requires close attention. Double-checking calculations is a necessity.
    But we are all human, and we all make mistakes (yes, me too, of course...). No problem with that, if the results are corrected once they have been discovered.

  8. andi - 02.04.2013, 19:54 Uhr (Report comment)

    Dear Mr Morris,
    I'm sorry, but these figures are not correct. The german power imports are 2,3 billion euros, not 1.4 billions. If you calculate with these numbers, he result stays the same (i.e. German power exports more valuable than its imports), but the price per kWh is 5.3 ct for the imports. Maybe you could correct that. And thank you for this important piece of imformation, it's exactly the opposite of what we hear almost daily here in Germany!

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