Germany’s switch to renewable energy sources is a success story. Ever since the country dedicated itself to a transformation of its energy supply following Japan’s Fukushima nuclear disaster five years ago, renewables have been booming. Last year, they accounted for a third of the energy consumed in Germany.
But while this success goes far in protecting the climate and environment, it has an economic downside. The electricity market has come apart at the seams.
While wind and solar electricity are being fed into the grid at set prices on a priority basis, natural gas- and coal-fired power plants, and soon nuclear power plants, are being forced off the market.
The price of electricity on the wholesale market has been in freefall for five years, plunging from €60 ($67.37) per megawatt-hour to the current €20.
The situation poses an existential threat for German operators of conventional plants like E.ON and RWE.