Lowest first-quarter electricity consumption

Last year's downward trend in electricity consumption continued in the first quarter of this year. Electricity consumption was down by 8.8% year-on-year in January, 9.8% in February and 6.2% in March. Consumption in the three months together was 8.3% lower than in the first three months of 2022. Electricity consumption totalled 122,522.1 GWh, the lowest first-quarter consumption since at least 2015.

The annual Earth Hour organised by the World Wide Fund for Nature (WWF) took place on 25 March starting at 8.30pm. The WWF calls on people around the world to switch off their lights for one hour. This is intended to raise awareness for climate and species protection, in particular. Earth Hour takes place on the last Saturday in March every year. The SMARD data show only small differences in Germany's consumption curves for this hour, however.

Electricity generation down by 5.9%

Total electricity generation in the first quarter of this year was 5.9% lower than in the same quarter in 2022. Renewable generation was down by 3.2% and conventional generation by 8.5%. Overall, renewables' share of total generation rose to 49.6%. Generation from renewables covered about 53.0% of electricity consumption (grid load).

The lower feed-in from renewables is due to the comparatively less favourable weather conditions. Firstly, solar generation recorded its highest ever first-quarter level in 2022, and the level in the first quarter of this year was 20.0% lower. Secondly, there was a high level of feed-in from wind power in the first quarter of 2022 due to several storms; wind generation in the first quarter of this year was therefore comparatively low, with feed-in from offshore wind down by 9.6% and feed-in from onshore wind down by 0.6% year-on-year.
Generation by "other" renewable sources was also down (by 12.3%), although these only make up a very small proportion of total generation.

Biomass and hydro generation were both higher in the first quarter of this year, up by 3.6% and 9.4% respectively, as less capacity had been available in the first quarter of 2022 because of maintenance work.

The largest decrease among conventional energy sources was in nuclear power generation, which was down by 32.7%. With some nuclear power stations having gone off the grid at the end of 2021/beginning of 2022, there was a slight decrease in generation by the remaining nuclear plants starting on 9 February. The gradual reduction in generation leading up to these power stations going offline is visible in the charts.

There was also a large decrease of 28.9% in generation by "other" conventional sources in the first quarter of this year. However, as with "other" renewable sources, these generally only represent a small proportion of total generation.
Despite the return to the market of some coal power stations in 2022, generation from hard coal and lignite was down year-on-year by 14.2% and 5.1% respectively.

However, there was a year-on-year increase in first-quarter generation from both pumped storage and natural gas, up by 22.8% and 7.1% respectively. One reason for the continued use of gas power plants is their flexibility. They can be switched off and fired up again much faster than coal or nuclear plants, which offers advantages if higher demand for electricity needs to be met at short notice. Gas-fired power plants can also be helpful, and in some cases essential, for redispatching and balancing. The great flexibility of gas power plants can be seen in their feed-in time series.

Natural gas is used to generate process and district heat and, for technical reasons, electricity is often produced at the same time. From the operators' perspective, it makes sense for combined heat and power (CHP) plants to continue producing electricity if they are responsible for supplying heat to an urban or industrial heating network and if it is not yet possible, or would be more expensive, to separate the heat generation from the electricity generation process.

SMARD - Electricity market data - Breakdown of total generation by energy source Q1 2023 (Q1 2022)

Bundesnetzagentur / SMARD

Average wholesale electricity price lower than in the first quarter of last year

Following Russia's invasion of Ukraine, there had been a huge increase in prices on the wholesale markets for electricity, gas and coal. Electricity prices were extremely volatile and closely connected to gas price trends, which in turn were highly dependent on developments in the war in Ukraine and Russia's steps to escalate it with regard to supplying gas to Germany and Europe. However, market reactions were not always rational and supported by sound fundamental data. The Bundesnetzagentur publishes status reports on the supply of gas in Germany here.

The main reason for the higher prices for electricity over the year was the increase in natural gas prices that occurred in the second half of 2021. Natural gas power plants set the price for many hours in European wholesale electricity trading. The last quarter of 2022 then saw a decrease in electricity prices.

In the first quarter of 2022, prices were often high for the above-mentioned reasons and were higher than €200/MWh in 859 of the 2,159 hours of trading. The highest price recorded was €700/MWh, resulting in an overall high average price of €184.62/MWh.

The average wholesale electricity price in Germany in the first quarter of this year was much lower at €115.82/MWh. There were negative prices in 23 of the 2,159 hours of trading, bringing down the overall average price. In the first quarter of 2022, negative prices were recorded in just 14 hours. In addition, the highest price this year of €270.22/MWh was considerably lower than that in the first quarter of 2022 (€700/MWh).

The decline in wholesale prices this year is also due to the above-mentioned decrease in electricity consumption and the conventional energy sources' smaller share of total generation. Moreover, in the last quarter of the year some coal power stations returned to the market, which increased generating capacity and thus the supply on the wholesale electricity market. Generating costs for gas power plants were also lower in October following a decrease in natural gas prices.

Overall, the average wholesale price in Germany in each of the three months of the first quarter was lower than last year.

The highest price (€270.22/MWh) was recorded between 9am and 10am on Monday 23 January. The average wholesale electricity price in Germany's neighbouring countries in this hour was €261.49/MWh. The higher price in Germany was due to the high amount of generation during this hour from conventional energy sources (54.0 GWh), which covered a large share of the electricity consumption (68.0 GWh). In this hour, Germany imported 1.6 GWh more electricity than it exported.

The lowest price of negative €6.02/MWh was recorded between 1pm and 2pm on Saturday 25 March. During this hour, electricity consumption (grid load) was almost continuously covered by renewables with a generation of 53.1 GWh. During the same period, the average price in Germany's neighbouring countries was €21.09/MWh and Germany exported about 12.0 GWh (net).

The average price in Germany's neighbouring countries in the first quarter of this year was €119.85/MWh and thus slightly higher than Germany's average price (€115.82/MWh).

Commercial foreign trade

In the first quarter of this year, Germany exported 8,785 GWh more electricity than it imported, making it a net exporter. Total net exports were lower than in the same quarter of 2022 (12,109.8 GWh).

Germany was a net exporter of electricity to:

• France, with 4,293.2 GWh (Q1 2022: 6,061.7 GWh)
• Austria, with 3,256.6 GWh (Q1 2022: 6,798.9 GWh)
• Switzerland, with 1,764.1 GWh (Q1 2022: 1,293.5 GWh)
• Belgium, with 1,053.6 GWh (Q1 2022: 919.8 GWh)
• Luxembourg, with 963.4 GWh (Q1 2022: 1,041.1 GWh)
• Netherlands, with 580.0 GWh (Q1 2022: 1,082.4 GWh)
• Czechia, with 526.8 GWh (Q1 2022: 580.1 GWh)
• Poland, with 352.2 GWh (Q1 2022: net imports of 743.5 GWh).

Germany was a net importer of electricity from:

• Denmark 1, with 1,902.5 GWh (Q1 2022: 2,167.4 GWh)
• Sweden, with 727.1 GWh (Q1 2022: 900.3 GWh)
• Norway, with 725.1 GWh (Q1 2022: 771.4 GWh)
• Denmark 2, with 650.2 GWh (Q1 2022: 1,085.1 GWh).

There was a shift from net importer to net exporter in trading with Poland in the first quarter of this year. Germany imported 743.5 GWh more than it exported in the first three months of 2022 but exported 352.2 GWh more than it imported in the same period this year.
The reason for the shift is the developments in wholesale prices. In the first quarter of 2022, wholesale prices in Poland were lower than in Germany in 1,439 hours, and Poland's average price of €135.63/MWh was lower than Germany's (€184.62/MWh). It therefore made economic sense for Germany to import electricity from Poland.
In the first quarter of this year it was the other way round. With an average price of €129.68/MWh in Poland, it was cheaper for Poland to import electricity from Germany, where electricity was cheaper in 1,333 hours.