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Less generation from natural gas - Electricity generation and electricity trading in September 2021
15 October 2021 - Electricity consumption in September was up 1.1% and total generation was up around 3% compared with September 2020. The average wholesale price was €128.37/MWh and Germany was a net exporter in commercial foreign trade.
Electricity consumption (network load) this September totalled 39.2 TWh, which was 1.1% higher than in September 2020 (38.8 TWh).
Total electricity generation in September was 40.5 TWh, an increase of around 3% compared with the same month of the previous year (38.3 TWh). Electricity generation from renewable energy sources was 4.4% lower and generation from conventional energy sources was around 8% higher. Renewable energy contributed 36.9% of the total generation in September.
Conventional electricity generation from hard coal in particular was higher, with a 58.2% increase compared with September 2020.
Electricity generation from lignite increased by 10.7%, other conventional energy sources by 16.7%, and nuclear energy by 3.1%.
By contrast, generation from natural gas was down 32.4% and generation from pumped storage was down 11.3%.
The chart illustrates electricity generated from hard coal and natural gas in September of 2019, 2020 and 2021.
Higher prices for emission allowances can and should make electricity generated from fossil fuels, and in particular from lignite and hard coal, increasingly expensive on the electricity market and as a consequence make electricity generation from these sources economically less viable. Gas-fired power plants that emit less CO2 than coal-fired plants have correspondingly lower CO2 costs, thus gas-fired plants can benefit when fuel prices are also low. Under these conditions, what is known as a "fuel switch" takes effect on some days. This is when gas-fired plants take the place of hard coal-fired plants in the merit order and set the prices on the wholesale market. Fuel switches occurred, for example, in September 2019 and September 2020.
The above numbers for September, however, show signs of a reversal. The profitability of gas-fired power plants has declined because gas prices are currently higher, and that in turn has increased the competitiveness of hard coal-fired plants in spite of the high costs for emission allowances. The advantage of emission allowances has been superseded by the higher costs of gas.
As was the case in August, the decrease in electricity generation from pumped storage is also due to the maintenance work being done at Germany's fourth largest pumped storage power station "Wehr". The power station, which has a rated capacity of 910 MW, is currently not in operation.
Highest and lowest hourly generation from renewable energy
Electricity feed-in from renewable energy sources reached its highest level of 60.1 GWh on Thursday 23 September between 12pm and 1pm, accounting for 88.6% of the grid load during this time.
Of the 60.1 GWh, onshore wind and PV systems provided 25.8 GWh and 25.3 GWh respectively. Another 4.3 GWh were generated by biomass, 3.2 GWh by offshore wind, 1.4 GWh by hydropower and 0.1 GWh by other renewables.
The lowest level of renewable generation occurred between 7pm and 8pm on Saturday 25 September (6.5 GWh). Biomass provided the biggest share (4.2 GWh), followed by hydropower (1.3 GWh) and onshore wind (0.7 GWh). Offshore wind and other renewables generated the remaining 0.3 GWh.
During this hour generation from all renewables covered 12.2% of the electricity consumption (the grid load).
Wholesale electricity prices
The wholesale price in Germany averaged €128.37/MWh, which was nearly three times higher than in September 2020 (€43.69/MWh). The trend toward higher wholesale prices could be seen in recent months.
The lowest wholesale electricity price was reached on Thursday 23 September (€.08/MWh) between 2pm and 3pm. During this hour, renewable generation (58.5 GWh) met 88.9% of electricity consumption (grid load), which was 65.8 GWh.
The highest price (€237.01/MWh) was recorded between 7pm and 8pm on Tuesday 28 September. That is also the highest German wholesale price to date since the introduction of the Germany/Luxembourg market area.
During this hour, a very low level of renewable generation (8.4 GWh) coincided with a high level of electricity consumption (63.9 GWh). A look at the beginning of October 2021 shows that this trend continued in the 40th calendar week.
The table below illustrates the stark contrast between the two Septembers, especially with regard to the minimum wholesale prices. The lowest price in September 2020 was minus €58.80, while this September the lowest wholesale price was €.08/MWh. Thus there were no hours of negative prices on the day-ahead market this September.
The 6 hours of negative electricity prices in September 2020 reduced the average price for that month. The maximum wholesale price (€200.04/MWh) was, however, similarly high to this year's maximum price.
Day-ahead wholesale prices in Germany
Number of hours with negative prices
Number of hours with
The overall reason for the higher prices is, as in the previous months, the conventional power stations' high generation costs. These costs include the costs for fuels and emission allowances, both of which remain high and strongly influence the wholesale price. In addition, there has been a low level of feed-in from renewables. Following a temporary, global fall in electricity consumption due to the coronavirus pandemic, consumption is now returning to its previous level. This tends to cause an increase in prices. Rising electricity demand also leads to greater demand for fuels. The higher levels of generation from hard coal mentioned above push up demand for emission allowances as well, making them more expensive. These factors affect the wholesale price. Consequently, overall prices are higher at the moment.
Commercial foreign trade
There is an interaction between supply and demand across the whole of Europe. Electricity is produced within Europe wherever it is cheapest. When Germany imports electricity, it benefits from the more favourable conditions for generation in other countries, and vice versa. The respective countries' wholesale prices on the day-ahead market are the result of this interplay. A lower price in Germany than in the Netherlands, for example, shows that generation is cheaper here and therefore electricity is exported to the Netherlands. The common market causes the prices to converge. Price differences remain whenever there is a shortage of options for transmitting the electricity.
In September the average price in Germany's neighbouring countries (€126.26/MWh) was similar to Germany's average price (€128.37). The lowest average price of €102.26/MWh was registered for Poland, and the highest average price of €138.04/MWh was registered for Switzerland.
Germany exported about 1,908 GWh more electricity than it imported in the month, making it a net exporter.
Germany was a net exporter of electricity to:
• Austria, with 1,512.1 GWh (September 2020: 614.2 GWh)
• the Netherlands, with 834.4 GWh (September 2020: net import of 227.1 GWh)
• France, with 46448 GWh (September 2020: 706.6 GWh)
• Switzerland, with 347.4 GWh (September 2020: 29.9 GWh)
• Luxembourg, with 327.6 GWh (September 2020: 326.9 GWh)
• Belgium, with 233.4 GWh (trading was not yet possible in September 2020)
Germany was a net importer of electricity from:
• Denmark, with 631.0 GWh (September 2020: 545.3 GWh)
• Poland, with 499.1 GWh (September 2020: net export of 237.0 GWh)
• Norway, with 377.9 GWh (trading was not yet possible in September 2020)
• Czechia, with 173.0 GWh (September 2020: net export of 24.1 GWh)
• Sweden, with 131.0 GWh (September 2020: 116.5 GWh)
Unlike in September 2020, direct trade with Norway and Belgium is now possible via the NordLink and ALEGrO interconnectors.
The net export to Switzerland, which has increased by 317.5 GWh, is due to the market situation. As mentioned above, Switzerland had the highest average price (€138.04/MWh). Electricity from Germany was less expensive in 464 of the 720 hours of trading, making it cheaper for Switzerland to import electricity from Germany.
Price structures were also the reason why net imports were higher in trade with Poland, where net imports were up by 262.1 GWh. Poland, as mentioned earlier, had the month's lowest average price (€102.26/MWh). A look at the individual hours of trading shows that electricity from Poland was cheaper in 603 of the 720 hours of trading. In September 2020 electricity from Poland was less expensive in just 64 hours of trading. When comparing the values, it should be noted that market coupling between Poland and Germany has only been in place since 17 June 2021 to efficiently manage transmission capacity. Prior to that, capacity had to be bought at auction first so that electricity could then be traded internationally.