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Wahli's avatar

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,

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Jérôme à Paris's avatar

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

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