Germany’s renewable energy growth causes Europe’s electricity costs to fall

GermanSolar energy

Thanks to the growth in renewable energy production, Germany and its neighboring countries have seen a significant drop in electricity price.

A new research data released by Platts Continental Power (CONTI) Index reveals that in Germany, France, Belgium, Switzerland and the Netherlands, the energy price index dropped to €35.06/MWh (per megawatt hour), which was an 18 percent decrease from the month before.

Prices have steadily decreased since the start of 2014.

“A mid-March surge in German wind output followed seven days of peak solar output, which rose above 20 gigawatts (GW) to a new monthly record of 23 GW on March 20,” said Andreas Franke, Platts managing editor, European power and gas.

“German power prices for March 16 delivery turned negative as wind power output rose above 24-GW combined with stronger solar production,” Franke said. “Further along the curve, German year-ahead power prices fell below €34/MWh in March for the first time in more than nine years as the price CO2 fell drastically and coal prices retreated.”

Solar and wind energy combined contributed over 70GW, making these renewable energy systems the country’s biggest power producers.

The Platts data found that compared to 2013, for the first three month of 2014, the output from German wind and solar energy has improved by 40 percent. More specifically, solar energy experienced a 74 percent boost from over a year ago and renewable wind energy had a 31 percent increase from the first quarter of last year.

However, renewable energy producers in Germany  are facing a new challenge thanks to Chancellor Angela Merkel’s decision to lower the cost of the country’s transition away from nuclear power to renewable energy.

Under the new law, domestic operators of renewable energy plants will have to pay 50 percent of the country’s renewable energy surcharge, which is currently €0.624 per kilowatt hour, as per news reports.

Despite this Germany has set a renewable energy target wherein it hopes to make up between 55 to 60  percent of its total energy production from these sources by 2035.

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