Top 5 Reasons to Watch the German Energy Market This Week
5. As renewables rise, prices continue to fall.
This is a boon to consumers, but to the detriment to the utilities.
“In the second quarter, Germany's wholesale power prices fell 5.8 percent from year-ago levels, hitting their lowest point in more than seven years,” reports Roger S. Conrad for Seeking Alpha. “Meanwhile, renewable energy's share of the generation market climbed to a record 29 percent, inducing RWE to terminate 500 megawatts (MW) in sales contracts and announce the shutdown of another gigawatt (GW) of capacity.” Conrad explains that the jump in renewable is cutting into traditional energy markets, causing utilities to lose profits.
4. Solar is taking off with or without the utilities.
The top three utilities in Germany—E.ON, RWE, and EnBW—own a measly 0.003% of German solar capacity. However, the renewable energy source has taken off in Germany, leaving the utilities in the dust.
“A slew of smaller, green-energy providers have built wind and solar capacity, benefiting from state subsidies under Germany's plan to phase out nuclear power by 2022,” Christoph Steitz writes for Reuters. “Germany now has nearly 37 gigawatts of installed solar capacity, meeting 28.5 percent of its domestic power demand in the first half of 2014, according to energy industry lobby BDEW.”
3. E.ON and REW are looking to make up ground.
As coal takes a nosedive in Germany, the country’s biggest utilities look to renewable to make up lost ground.
“By 2017, analysts expect a push by top utilities E.ON and RWE into renewable energy to bring their slide in market share and in profits to a halt,” Steitz writes. “Solar leasing may play a role in such a turnaround and will be a development to watch.”
Germany currently has 37 GW of installed solar and meets 28.5 percent of the country’s renewable energy needs.
2. Germany needs to do more regarding climate change.
As the push for a green energy revolution continues in Germany, some are concerned about the resurgence of coal. Writing for the National Interest, Peter Mellgard warns of this the energy revolution “turning black.”
“Coal is enjoying a revival,” he says. “In late July, the Environment Ministry admitted Germany was unlikely to reach its 2020 emissions target. And, meanwhile, centuries-old medieval villages are being destroyed to open up new areas to mine and burn one of the dirtiest fossil fuels known to man for decades to come.”
Green parliamentarian Bärbel Höhn says more work is needed for Germany to reach its goals.
“Angela Merkel used to be the climate queen of Europe,” Höhn told Deutsche Welle. “But since Germany held the EU Presidency, not enough has happened. Germany has achieved a lot in the areas of climate protection. But we have stopped leading by example in the last few years. The same can be said of the EU too.”
1. The utilities are starting to take action.
RWE lost 5% of its German clients and E.ON lost 12% over the past 3 years, so they’ve got to make a move sooner rather than later.
"We're now in the process of understanding how it works when it's not simply about building a power plant and selling electricity and gas. That's simply not in our DNA," Thomas Unnerstall, board member at N-ERGIE, Germany's eighth-largest utility by sales, told Reuters. "This (solar leasing) is one way of doing that."
Hydrostor receives $4m funding for A-CAES facility in Canada
Hydrostor has received $4m funding to develop a 300-500MW Advanced Compressed Air Energy Storage (A-CAES) facility in Canada.
The funding will be used to complete essential engineering and planning, and enable Hydrostor to plan construction.
The project will be modeled on Hydrostor’s commercially operating Goderich storage facility, providing up to 12 hours of energy storage.
Hydrostor’s A-CAES system supports Canada’s green economic transition by designing, building, and operating emissions-free energy storage facilities, and employing people, suppliers, and technologies from the oil and gas sector.
The Honorable Seamus O’Regan, Jr. Minister of Natural Resources, said: “Investing in clean technology will lower emissions and increase our competitiveness. This is how we get to net zero by 2050.”
A-CAES has the potential to lower greenhouse gas emissions by enabling the transition to a cleaner and more flexible electricity grid. Specifically, the low-impact and cost-effective technology will reduce the use of fossil fuels and will provide reliable and bankable energy storage solutions for utilities and regulators, while integrating renewable energy for sustainable growth.
Curtis VanWalleghem, Hydrostor’s Chief Executive Officer, said: “We are grateful for the federal government’s support of our long duration energy storage solution that is critical to enabling the clean energy transition. This made-in-Canada solution, with the support of NRCan and Sustainable Development Technology Canada, is ready to be widely deployed within Canada and globally to lower electricity rates and decarbonize the electricity sector."
The Rosamond A-CAES 500MW Project is under advanced development and targeting a 2024 launch. It is designed to turn California’s growing solar and wind resources into on-demand peak capacity while allowing for closure of fossil fuel generating stations.
Hydrostor closed US$37 million (C$49 million) in growth financing in September 2019.