Lecture on the current developments in the energy market in the RE-Colloquium

The energy industrystands by the energy turnaround, but the juxtaposition of strongly fluctuating renewable energy sources and conventional power plants is massive in difficulty, said Andreas Kuhlmann of the Federal Association of Energy and Water Industries (BDEW). Due to the rapidly rising REA-apportionment the costs for consumers and the industry rise. At the same time, the declining profitability of conventional power plants threatens the economic viability of important back-up reserves for the safe supply.
The energy industry therefore wants more transparency, more flexibility and greater equity in the distribution of loads. Andreas Kuhlmann, Director of Strategy and Policy at BDEW in Berlin, responded to the latest developments in the coalition negotiations in the Resource Efficiency Colloquium at the University of Pforzheim. His assessment of the latest agreements is cautiously optimistic: In addition to an amendment of the Renewable Energies Act (REA) a new energy market design will take place. Here, especially the competitive spirit needs to be strengthened, Kuhlmann said.

The expert calculated that currently only 30 percent of the energy price is competitively determined by the actual electricity production and procurement. Half the price goes to taxes and fees. Since deregulation in 1998, the price of electricity has increased by 44 percent for industry and 69 percent for households.
Through the REA apportionment he expects cost of nearly 24 billion euros, beared to one-half  by the industry and one- third by the households in 2014. Almost half of this allocation ends up with the operators of photovoltaic systems. If one would fully eliminate the compensation scheme for industrial enterprises, in 2014 the EEG apportionment  per kilowatt-hour would be held at 4.88 cents instead of 6.24 cents.

Kuhlmann expects conventional power plants  to be indispensable for a long time . Responsible for this are the daily fluctuations in power generation, particularly photovoltaics. The formula "solar and wind power are an ideal couple and complement each other in the course of the year "is too simple a view. Especially critical for the power plant operators is the so-called merit-order effect: through the safe and cheap supply of electricity from renewable engergy  plants, expensive power plants, for example, Natural gas power plants, run only a few hours a year and no longer amortise. Therefore, in the future a so-called capacity market should be considered, in which not only the delivered current , but also the provision of reserve capacity is paid. The ultimate goal , said Kuhlmann, is to provide 80 percent of the power consumption by renewable energy in 2050.