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Power trading

German power exports still more valuable than imports

Last year, the electricity Germany exported was 6.3% more valuable per unit than the power it imported – the exact opposite of the narrative that Germany is dumping excess renewable electricity on neighboring countries at low cost. France faces a particularly dire imbalance financially; German electricity is 24.4 percent more valuable.

Subtract nearly 1.9 billion euros from the cost of the Energiewende in 2013. That is how much the country’s net power exports were worth.

It is generally held that Germany dumps excess renewable power onto neighboring countries, so the power the Germans sell must not be as valuable as the power it imports. The conclusion seems logical, but in Germany, the discussion is based on data, not logic. Power prices are frequently considerably more negative in France when they are negative in Germany. Last year, I wrote about how the average price of a kilowatt-hour Germany exported to neighboring countries was 5.6 cents, compared to 5.25 cents for the average kilowatt-hour imported. In other words, German electricity was worth 0.35 cents more than foreign electricity.

But last year, that announcement was never explicitly made; the press release from Germany’s Statistical Office merely presented the raw data. This year, there wasn’t even a press release.

So I went and got the raw data myself (click here).

Country Power exports MWh Value in 1,000 euros Power imports in MWh Value in 1,000 euros
Belgium - - - -
Luxembourg 4,137,024 209,295 - -
Sweden 1,049,091 44,492 1,078,890 46,899
Denmark 6,128,898 301,543 3,678,792 209,096
France 1,605,290 85,743 11,606,053 498,465
Netherlands 24,491,975 1,337,447 273,985 14,313
Austria 15,424,664 812,725 7,070,229 382,777
Poland 5,672,752 270,502 562,580 25,932
Czech Republic 2,525,571 135,571 9,203,951 471,618
Switzerland 10,792,061 559,501 3,398,437 164,927
TOTAL 71,827,326 4,581,922 35,794,027 1,767,128

Price of kWh (all) 5.2303 4.9197
  Price of kWh (France) 5.3413 4.2949

First, we see that power is not traded with Belgium, information I include just to make that issue clear. Likewise, Luxembourg does not export back to Germany at all. The difference between the average price of a kilowatt-hour exported and imported between all neighboring countries is 0.31 cents in favor of Germany, making German exports roughly 6.3 percent more valuable than the power it imports. The discrepancy with France is striking at nearly 25 percent.

Note, however, that these are physical power flows, not commercial purchases. In the chart above, it looks like France sells eight times more electricity to Germany that it buys from the Germans, but France uses the German grid to sell power to Switzerland and even Italy. In reality, France is a huge net commercial purchaser of German power.

The reasons for this are easy to understand empirically (again, not logically). First, we must move beyond the nonsense that Germany is dumping otherwise unsellable renewable power on its neighbors. (France, however, clearly is dumping otherwise unsellable nuclear power on neighboring countries.) Germany just posted a record peak of 73 percent renewable electricity earlier this month; clearly, there is no excess renewable power, for which a level above 100 percent would be required (a threshold Denmark has already crossed with wind power alone).

And as I have also explained, foreign demand for German power directly increases production of conventional electricity within Germany; renewables are completely unaffected. If anything, prices on the exchange are the result of low capacity factors at conventional plants being crunched between domestic German power demand and production of renewable electricity. Germany is dumping conventional power on neighboring countries.

The chart I used in that post about the peak German renewable power record also illustrates when German power is imported and exported.

Agora Energiewende

Here, we see that the red line represents German power demand. Where that red line is below the envelope of the gray area, Germany is exporting. During the ramp up phases, the envelope and the red line are quite close. When power demand (and power prices) are low, Germany exports a bit, but it exports even more when demand and prices are high.

The nuclear plants in France generally run as close to full capacity as possible, so they cannot ramp up further. France was the second-biggest importer of German electricity behind the Netherlands last year. But the Dutch are shrewd businesspeople, not ideological adherents to particular technologies. German power sold to the Netherlands was only 4.6 percent more valuable than the Dutch power that Germans bought.

So much for the narrative that Germany is dumping renewable electricity on its neighbors at a loss. It’s a logical story, but then again so was Aristotlean metaphysics. The Middle Ages gave rise to scientific thinking based on experiments and data – and that’s also what the German Energiewende is based on. Unfortunately, a lot of the criticism looks like the wishful schadenfreude of metaphysicians peddling their explanations of the four elements and bodily fluids as fact when, in fact, their story is only logical. (Craig Morris)

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4 Comments on "German power exports still more valuable than imports "

  1. heinbloed - 24.05.2014, 19:10 Uhr (Report comment)

    El. prices in Belgium going up, closures of atomic power plants causes el. prices to increase:


    Only buffered by a record RE production and a reduction in el. demand:


    Belgian atomic reactors are the least reliant on the globe, taking the 5th worst position:


    Fissures in the reactors have increased in size due to radiation:


    The two reactors might not come back into operation, two more will be shut anyhow in 2015, winter el. supply at risk, grid authority in preparation for crisis:

    http://www.elia.be/nl/over-elia/newsroom/news/2014/27-03-2014-impact-stopzetting-Doel-3- Tihange-2
    Owners faced with heavy losses :

    BASF demands priority given for German-Belgian interconnector:

  2. heinbloed - 22.05.2014, 22:31 Uhr (Report comment)

    The question about Belgium:
    There is no major direct connector (cable) from Belgium to Germany or vice versa.
    One is to be build, one of the modern 'no-loss' direct current cables. Underground to avoid any delays with the people who have to live next to it.
    So imports and exports to Belgium propably run via the Netherlands, Luxembourg or France and are statistically 'metered' there.

  3. James Wimberley - 22.05.2014, 18:42 Uhr (Report comment)

    The exports clearly correspond to the solar midday peak. In terms of the merit order, you are correct to write that the exports are displaced conventional power (I call it carbon dumping). If we are allowed to assume that the lignite and hard coal plants can't be ramped, then it's equally reasonable to describe the exports as solar. However you describe them, the exports are not reducing anybody else's wind or solar, and very probably not nuclear either, so the carbon impact of German solar is all positive. I suppose the exports are cutting into the neighbours' gas plants, which is worse for carbon emissions but better for shafting Putin.

  4. Thomas - 22.05.2014, 14:15 Uhr (Report comment)

    Great article Craig. Well researched relevant information. Thanks!

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