‘Tis the season for giving, and Germany certainly excelled itself in the gifting stakes over the holiday period. The country, albeit begrudgingly, paid its neighbors to offload thousands of megawatt hours of electricity on New Year’s Day, the result of a surplus that grid operators had to dispense with.
Such energy giveaways — foreign clients received up to €76 per megawatt hour in addition to the free electricity — are increasingly common in Germany. The country’s famous (infamous?) transition to green power is in full swing, with the target to wean Europe’s largest economy off fossil fuel-based power by 2050. This has meant huge growth in renewable sources such as wind and solar power. The problem, however, is that the country’s fleet of conventional coal generators continues to relentlessly churn out cheap electricity. And to make matters worse, grid networks are finding it more and more difficult to distribute power around the country. As a result, the number of hours during which Germany paid clients to offload electricity rose to 146 hours in 2017 from just 15 in 2008.
Under the German Renewable Energy Law, designed to help develop green power, grid operators are obliged to accept and distribute power from renewable sources even when there’s no demand for it on the electricity exchange. In such situations, the price of power turns negative, meaning grid operators have to sell at a loss, passing on the costs to German customers. That means the issue has turned political, and has been pushed up the agenda of preliminary coalition talks between Angela Merkel’s conservatives and the Social Democrat Party, due to start this week.