Electricity prices in Germany are among the highest in the world and represent a major burden for industrial and private consumers. Among other things, they make it difficult for energy-intensive companies to compete internationally. Therefore, the Institute of Energy Economics at the University of Cologne (EWI), together with the Forum for Future Energies, organized the first “Berlin Science Talk on the Energy Industry” on the topic of “How are electricity prices developing?” at the Berlin Representation of the State of North Rhine-Westphalia. The event focused on the main cost components: Wholesale prices, grid fees and EEG differential costs.
Dr. Ann-Kathrin Klaas, Head of Research Area at the EWI, spoke about wholesale prices on the electricity market, which could show only a slight downward trend in the coming years with increasing volatility. The hours with negative prices could also in-crease due to the increased feed-in of renewable energies. Prof. Dr. Lion Hirth, Professor of Energy Policy at the Hertie School, spoke in favor of local prices in his presentation on bidding zones. “Only with a bidding zone division will it be possible to manage decentralized flexibility efficiently,” explained Hirth. The challenges of zone splitting could be solved.
Philipp Kienscherf, Head of Research Area at the EWI, showed the possible development of grid fees. In the climate neutrality scenario of the grid development plan, large in-vestments in the electricity grid would be necessary, especially in the distribution grids. The effect of these investments would depend on various parameters. However, he explained: “In all the scenarios we looked at, there is a significant increase in grid fees by 2045, up to a doubling.” Marvin Dalheimer, Head of Energy Industry and Regulation at the German Energy and Power Industry Association (VIK), explained that the cost bur-den on industry due to rising grid fees was playing an increasingly important role. For the international competitiveness of German industry, containing these costs would be important.
On the subject of EEG differential costs, Dr. Philip Schnaars, Head of Research Area at the EWI, explained the reasons for their recent predicted increase in the coming years as part of the transmission system operators’ medium-term forecast. In particular, he discussed the possible development of the annual market value factors for wind and solar. These factors describe the ratio of the market value of the electricity fed into the grid to the average electricity price. The annual market value factors for wind energy are expected to remain stable, while a considerable decline is expected for solar energy in the near future, which would result in additional financing requirements. Wilhelm Kiewitt, Head of Energy Management at 50Hertz, added that the cost-benefit ratio would improve over time, as plants with high remuneration rates would be phased out. This means that the increase in EEG differential costs could be slowed down almost completely in a few years despite the continued expansion. “A reduction in the level of support plays a subordinate role in the further development of EEG support costs. It is much more important that more plants react to market prices and adjust their generation accordingly”, Kiewitt says.
The concluding panel discussion with EWI Director Prof. Dr. Marc Oliver Bettzüge, Marvin Dalheimer, Head of the Energy Industry and Regulation Department, Association of the Industrial Energy & Power Industry (VIK), and Wilhelm Kiewitt, Head of Energy Economics, 50Hertz, moderated by Dr. Annette Nietfeld, Managing Director of Forum für Zukunftsenergien, also focused on electricity prices and the costs of the energy transition. EWI Director Bettzüge emphasized the challenges posed by the energy transition construction project in planning and governance: “Questions of economic efficiency must be given higher priority than before in the further implementation of the energy transition.” When asked about bid allocation, he pointed to current research results which rated the added value of such a measure as rather low compared to low-threshold market interventions.
The Berlin Science Talk is a new working format that EWI and Forum für Zukunftsenergien have organized for the first time. “We are looking forward to the next edition of the Berlin Science Talk in 2025,” said Nietfeld, announcing the continuation of this collaboration.
