If the German government sticks to its planned expansion path for renewable energies, the average electricity price on the exchange could fall by up to 23 percent by 2030 – compared to a reduction of around 45 percent if the current expansion rates for wind and solar energy are capped. This also applies if electricity demand in 2030 turns out to be lower, for example because fewer electric cars and heat pumps are added than planned. This is the conclusion of a new analysis by Agora Energiewende. The analysis looks at electricity prices up to 2030 for two scenarios. The first scenario is based on a rapid ramp-up of climate-neutral industrial production, electric cars and heat pumps, which will cause electricity demand to rise sharply by 2030. A second scenario assumes lower electricity demand against the backdrop of the current market ramp-up. As a result, the average electricity exchange price in 2030 will be 20 euros per megawatt hour lower in both scenarios if the expansion of wind and solar energy continues as specified in the Renewable Energy Sources Act (EEG).
»The expansion of renewable energies creates the basis for permanently attractive electricity prices that benefit everyone: businesses and private households. The federal government should therefore definitely stick to its expansion path,« says Markus Steigenberger, managing director of the Agora Think Tanks. »Government subsidies, such as the reduction of electricity tax and grid fees, make perfect sense in view of the increased costs resulting from the fossil fuel price crisis. In the medium and long term, however, investments in renewable energies are better suited to permanently reducing electricity prices.«
The price advantages of expanding renewable energies for electricity customers result primarily from the so-called merit order effect: since the electricity price on the exchange is determined by the most expensive power plant still needed, the increased feed-in of cheap green electricity displaces expensive gas and coal-fired power plants from the market. This lowers the average exchange electricity price. As the Agora analysis shows, electricity grid costs have no impact on electricity prices – regardless of the pace of expansion of renewable energies until 2030.
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