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|
||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.
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)