I am presently examining the FiT prices for solar energy in Germany, and I am intrigued by the figures you have provided. According to Bundesnetzagentur, the average FiT PV price was 55.1 €/MWh in April 2022, and it is anticipated to be at most 73.7 €/MWh for ground-mounted PV in 2024. However, I have noticed that your estimate for the FiT price for PV is significantly higher at 242 €/MWh. Could you please clarify the reason for such a substantial difference in figures?
- to compare the CfD or other similar mechanisms to your "baseload price" you need to understand how the difference is calculated - against the spot price or against an average (over months or even longer). In the second case the renewables producer bears the capture risk; in the first case they don't
- the EEG included the gross payment to producers, it was never a correct masure as it should have deducted the actual market price of power, so tha was always a flawed measure
- market premium mechanism (or one-sided CfDs) are terrible mechanisms for the budget as they provide a floor to renewables, but let them keep the upside - It's obviously very favorable to renewables producers, but needlessly so - and it has led to zero bids, which are extremely inefficient
- for zero prices, there's no a limit of 6 hours beyond which projects no longer get the tariff. This needs to be cut down to zero - renewables should bear zero price risk, especially as they are very flexible and easy to cut. That would almost instantly eliminate below-zero prices
In the calculation done by the German TSOs to estimate the financing needs, they are taking into consideration the revenues from the "power purchased" of the FIT. They even consider a capture rate (which is correct for wind, less so for solar in my opinion).
I completely agree on the market premium mechanism, this is such a strange system, at least cap the upside.
Dear Julien,
I am presently examining the FiT prices for solar energy in Germany, and I am intrigued by the figures you have provided. According to Bundesnetzagentur, the average FiT PV price was 55.1 €/MWh in April 2022, and it is anticipated to be at most 73.7 €/MWh for ground-mounted PV in 2024. However, I have noticed that your estimate for the FiT price for PV is significantly higher at 242 €/MWh. Could you please clarify the reason for such a substantial difference in figures?
Thank you,
Thanks for your message. Check here, slide 6.
https://www.netztransparenz.de/xspproxy/api/staticfiles/ntp-relaunch/dokumente/erneuerbare%20energien%20und%20umlagen/eeg/eeg%20finanzierung/eeg-finanzierungsbedarf/2023-10-25%20ver%C3%B6ffentlichung%20eeg-finanzierungsbedarf%202024.pdf
242,12 € Festvergütung for solar. Your numbers are for new capacity, I believe. But historical installations get much more than new installations.
Makes a lot of sense now, thanks for the clarification
Several comments here:
- to compare the CfD or other similar mechanisms to your "baseload price" you need to understand how the difference is calculated - against the spot price or against an average (over months or even longer). In the second case the renewables producer bears the capture risk; in the first case they don't
- the EEG included the gross payment to producers, it was never a correct masure as it should have deducted the actual market price of power, so tha was always a flawed measure
- market premium mechanism (or one-sided CfDs) are terrible mechanisms for the budget as they provide a floor to renewables, but let them keep the upside - It's obviously very favorable to renewables producers, but needlessly so - and it has led to zero bids, which are extremely inefficient
- for zero prices, there's no a limit of 6 hours beyond which projects no longer get the tariff. This needs to be cut down to zero - renewables should bear zero price risk, especially as they are very flexible and easy to cut. That would almost instantly eliminate below-zero prices
Thanks for your comment.
In the calculation done by the German TSOs to estimate the financing needs, they are taking into consideration the revenues from the "power purchased" of the FIT. They even consider a capture rate (which is correct for wind, less so for solar in my opinion).
I completely agree on the market premium mechanism, this is such a strange system, at least cap the upside.