MENAFN - Arab News
German wind power irks neighboring grids
Power lines inside a wooden wind power plant tower are seen in Hanover.
(MENAFN - Arab News) Increasing German renewable power is under-cutting wholesale electricity prices across its borders, which may harm energy investments in neighboring countries.
The overall picture is of widening impacts on grids across central Europe from the ramp up in German renewables.
German solar power generation was up 47 percent in the first half of 2012 compared with the same period last year, and wind power generation up 21 percent, data from the Fraunhofer Institute show.
One impact from rising intermittent German wind power generation in the north of the country is of electricity spilling into neighboring networks en route back into southern Germany or Austria, called loop flows.
Another is of rising exports of cheaper, intermittent power, undercutting the economics of baseload power in Germany's neighbors.
Exports of German power to the Czech Republic, for example, are up four-fold in the first 10 months of the year compared with the same period in 2010.
A group of four east European grid operators, from the Czech Republic, Hungary, Poland and Slovakia, has argued to split the Germany-Austria bidding zone, limiting the geographical area across which bidders can purchase wholesale power directly at the same price.
Their stated aim is to tackle loop flows, which they complain are using up grid capacity and destabilizing networks.
But another effect would be to reduce competition with cheap, volatile wind power, for example for Czech exports of nuclear power to Austria.
Germany prefers to upgrade its internal grid, which should reduce loop flows.: Chancellor Angela Merkel's cabinet on Wednesday agreed to accelerate such upgrades.
The disagreement is evidence of widening impacts from Germany's decision to shift from nuclear into renewable power.
At present, bidding areas in European energy markets are largely divided along national borders with exceptions, for example, where Germany and Austria are a single zone. By contrast Italy, Sweden and Norway are fragmented.
Germany and its east European neighbors differ on how to deal with loop flows.
A report prepared for the German grid regulator Bundesnetzagentur last year argued loop flows were a result of a shift toward European Union market integration.
"Loop flows are technically inevitable, they occur irrespectively of the existence of congestion, and they need to be accepted according to EU law. Consequently, the occurrence of loop flows does not constitute a reason for altering the size of bidding areas," said the report - "Relevance of established bidding areas" - prepared by Frontier Economics and Consentec.
Central and east European grid operators disagreed in a report of their own, "Bidding zones definition," in March.
"We strongly believe that fundamental corrections in the definition of bidding zones should be introduced as soon as possible in order to improve the efficiency of coordinated capacity calculation and allocations, as well as to avoid the further escalation of insecure grid operation in the CEE region," the grid operators said.
The report illustrated the difference between scheduled and physical electricity flows across German borders.
The idea is that smaller bidding zones will bring sources of supply and demand closer, avoiding unplanned routes.
The discussion of loop flows hides another, potentially more political issue, however, regarding the trade impact of rising German wind power.
For Germany, exporting wind power via large bidding zones and closer market integration will help the country manage its increasingly intermittent generation.
For the Czech Republic, however, it undermines the country's own export market for baseload generation, and potentially the investment case for majority state-owned utility CEZ to build two new nuclear reactors.
Germany is a net exporter of electricity to its neighbors in aggregate, the Fraunhofer Institute data show, although that picture varies country by country.
Germany is consistently a net importer from the Czech Republic, according to electricity exchange data from the European Network of Transmission System Operators for Electricity (ENTSOE).
But German exports to the Czech Republic in the first 10 months of this year have risen more than four-fold compared with the corresponding period in 2010, the ENTSOE data show.
Over the same time period Czech exports have been steady, leading to a shrinking export surplus.
A trend of rising German exports in the past three years corresponds with renewable power reaching significant levels.
Wind and solar power get preferential grid access on the basis of their zero fuel and marginal costs.
The result is lower and more erratic wholesale power prices when German wind is available, not only in Germany but in eastern Europe, according to the European Commission's "Quarterly Report on European Electricity Markets"
"In January 2012 monthly average power prices in the Central East European Region (Czech Republic, Hungary, Poland, Romania, Slovakia, Slovenia) reached their lowest levels since autumn 2010," the first quarter review reported.
"This was mainly due to a milder-than-usual weather and the abundant wind and solar power generation in Germany.
"Price volatility reached particularly high levels in the second half of January when the impact of renewable generation in Germany and rapidly changing demand from the Balkans exerted an influence."
The position of the EU's executive Commission remains to be seen, while it is a strong proponent of free trade and efficiency in power markets.
But the strength of feeling in eastern Europe countries suggests one way or another they will seek to shield themselves from the ramp up in German renewable power.
- Gerard Wynn is a Reuters market analyst. The views expressed are his own.
MENA News Headlines
|Mar 10 2014||Saudi construction projects at USD195b in 3 years ,MENAFN|
|(MENAFN) Planned construction projects in Saudi Arabia in the following three years are estimated at USD195.4 billion, Saudi Gazette reported.
The Big 5 Saudi has launched and is expected to ...|
|Mar 10 2014||Dubai non-oil trade up to USD361b in 2013 ,MENAFN|
|(MENAFN) Dubai"s non-oil foreign trade surged USD25.58 billion last year, hitting a record USD361.7 billion, Khaleej Times reported.
India was the emirate"s top trading partner in the year as ...|
|Mar 10 2014||SW China Forest on Fire, Casualties Unknown ,Qatar News Agency|
|(MENAFN - Qatar News Agency) Firefighters are battling to extinguish a forest fire in southwest China's Yunnan Province, according to China's News (Xinhua). A total of 2,320 people, including 250 ...|
|Mar 10 2014||Waiting and Searching for Missing Malaysian Flight Continue ,Qatar News Agency|
|(MENAFN - Qatar News Agency) Chinese warship Mianyang has arrived at the waters suspected to be the site of the missing Beijing-bound Malaysian jetliner, military sources said on Monday. The warship ...|
|Mar 10 2014||Amnesty Accuses Syrian Forces of Committing War Crimes in Yarmouk ,Qatar News Agency|
|(MENAFN - Qatar News Agency) Amnesty International has accused the Syrian government forces of starving the population and targeting doctors in Yarmouk refugee camp in the outskirts of the capital ...|
|Mar 10 2014||Qatar's Mutaz Essa Barshim Wins Men's High Jump Gold Medal ,Qatar News Agency|
|(MENAFN - Qatar News Agency) Qatar's Mutaz Essa Barshim claimed gold medal in the Men's High Jump Final during day three of the IAAF World Indoor Championships at Ergo Arena on Sunday. The ...|
|Mar 10 2014||Al Sadd and Al Arabi Share Spoils in Qatar Stars League ,Qatar News Agency|
|(MENAFN - Qatar News Agency) Al Arabi and Al Sadd drew Saturday 1-1 in the 22nd round of Qatar Stars League.
Ibrahim Khalfan took the lead for Al Sadd in the 70th minute. It took Al Arabi only ...|
|Mar 10 2014||Kuwait Probes Deaths of Dolphins along Its Coast ,Qatar News Agency|
|(MENAFN - Qatar News Agency) Kuwait's Environment Public Authority (EPA) has launched a probe into the causes of dolphin deaths along the country's coasts overs the past few days. EPA's Deputy ...|
|Mar 10 2014||Qatar - Filmmaker Noujaim to Address Northwestern University Students ,Qatar News Agency|
|(MENAFN - Qatar News Agency) Academy Award-Nominated Director of The Square, Jehane Noujaim will be the graduation speaker at Northwestern University in Qatar's ceremony on May 4, the university ...|
|Mar 10 2014||Ukraine Could Sign EU Agreement Later in March ,Qatar News Agency|
|(MENAFN - Qatar News Agency) Ukraine said Sunday it could sign later this month part of a crucial EU agreement for greater integration, even as the former Soviet state remains in a state of upheaval. ...|
|Mar 10 2014||Public Security Director General Inaugurates 30th GCC Traffic Week ,Qatar News Agency|
|(MENAFN - Qatar News Agency) HE Director General of Public Security Staff Major General Saad Bin Jassim Al Khulaifi inaugurated on Sunday the events and activities of 30th GCC Traffic Week in the ...|
|Mar 10 2014||Arab FMs Approve Agenda of Kuwait Summit ,Qatar News Agency|
|(MENAFN - Qatar News Agency) Kuwait's First Deputy Prime Minister and Foreign Minister Sheikh Sabah Khaled Al-Hamad Al-Sabah said Sunday the 141st session of the Arab League Council has approved the ...|
|Mar 10 2014||Qatar - HE the Prime Minister Condoles Afghan President ,Qatar News Agency|
|(MENAFN - Qatar News Agency) HE the Prime Minister and Interior Minister Sheikh Abdullah bin Nasser bin Khalifa Al Thani has sent a cable of condolences to Afghan President Hamid Karzai on the death ...|
|Mar 10 2014||Omani Official Meets Qatari Administrative Development Minister ,Qatar News Agency|
|(MENAFN - Qatar News Agency) Oman's deputy premier for cabinet affairs, Fahd bin Mahmoud al Said, conferred on Sunday with Isa Saad Al Jafali Al Nuaimi , the Qatari administrative development ...|
|Mar 10 2014||Qatar - HH the Emir Sends Cable of Condolences to Afghan President ,Qatar News Agency|
|(MENAFN - Qatar News Agency) HH the Emir Sheikh Tamim bin Hamad Al Thani has sent a cable of condolences to Afghan President Hamid Karzai on the death of First Vice-President Marshal Mohammad Qasim ...|
|Mar 10 2014||Electricity Crisis Expected in Gaza as Fuel Runs Dry ,Qatar News Agency|
|(MENAFN - Qatar News Agency) The last shipment of Qatar-donated diesel -- used to fuel the Gaza Strip's sole power plant -- is expected to run out within four or five days, a Palestinian official ...|
|Mar 10 2014||Yemeni President Meets UN Official ,Qatar News Agency|
|(MENAFN - Qatar News Agency) Yemeni President Abd Rabbo Mansour Hadi met here on Sunday with UN Secretary-General Assistant and Special Adviser on Yemen Jamal Benomar.
Yemeni President said in a ...|
|Mar 10 2014||Six Nations Join Massive Sea Search Efforts ,Qatar News Agency|
|(MENAFN - Qatar News Agency) Six countries are involved in the search for the missing Malaysian airliner.
Search planes and ships from Malaysia, China, Vietnam, Singapore, the U.S
and the ...|
|Mar 10 2014||Attorney General Sets Up Environmental and Municipal Prosecution ,Qatar News Agency|
|(MENAFN - Qatar News AHE Attorney General Dr. Ali Bin Fetais Al-Marri issued a decision to establish a prosecution dealing with environmental and municipal cases.
The decision stipulated that ...|
|Mar 10 2014||Iraq Bomb Attack Toll Rises ,Qatar News Agency|
|(MENAFN - Qatar News Agency) A suspected suicide bomber has killed at least 32 people at a security checkpoint in Iraq, authorities have said.
In the deadliest of a series of attacks on Sunday, ...|