Federal Network Agency Releases Monitoring Report 2010

The Federal Network Agency, the German grid regulator, has released its Monitoring Report 2010. The report contains the agency’s findings with regard to the German electricity and gas markets for the year 2009. It includes information on the expansion of renewable power as well as grid expansion, energy security and trade, and the integration of European markets.

80% of the total expansion of generation capacities in the electricity sector resulted from new solar PV installations and wind power plants, with PV installations leading the field. A total of 3.9 GW of solar capacity were installed in 2009 after 2 GW in 2008. This constitutes an increase of 65%. Wind power capacity rose by 2.6 GW (2008: 0,8 GW), an increase of 11% (2008: 4%). Capacities of the other renewable energy sources rose by 0.5 GW in 2009. This increase was mainly attributable to biomass power plants.

As a consequence of the strong solar expansion, the operators of solar power plants received almost the same amount of feed-in tariffs as wind power plant operators. However, the electricity input of wind power plants exceeded the solar input by almost six times, Federal Network Agency (Bundesnetzagentur) pointed out. It forecasts a continuing solar PV expansion which will impact the EEG reallocation charge and have consequences for the grid. In addition, large offshore wind farms are likely to start operating in the coming years, the agency says. As feed-in tariffs for offshore wind power are also comparatively high, and as offshore wind parks have high capacities and full load hours, costs for wind power will considerably rise in the next years, the agency predicts.

Despite the challenge which the integration of renewables poses for the German grid, energy security in Germany was again high in 2009. Only an average 14.63 minutes of system interruptions per end customer occurred in 2009. Hence, the System Average Interruption Duration Index (SAIDI) figure fell below the one recorded for the previous year and is one of the best compared internationally.

With regard to the necessary restructuring and expansion of the German grids, Bundesnetzagentur supported the network operators for example by approving investment budgets. However, demands for higher grid fees have been rejected by the agency. “Current data do not support an increase of yields. On the contrary, the weighted average yield of outstanding Bundesbank bonds, an important parameter for the return on equity, fell”, Matthias Kurth, President of the Federal Network Agency, explained in a press release.

The necessary grid expansion is lagging behind, the report finds. Many of the 24 power line projects explicitly named in Energy Line Extension Act (Gesetz zum Ausbau von Energieleitungen – Energieleitungsausbaugesetz – EnLAG), which shall help facilitate power line projects on the extra high-voltage level (380 kV or more), are delayed, in some cases for years. According to transmissions system operators, 37 of another 139 expansion projects are also behind schedule. The real problem was not that operators are unwilling to invest, Mr Kurth said, it was the acceptance among the citizens concerned. The Federal Network Agency wanted to help in this regard, Mr Kurth stated.

Off-market electricity trade in Germany still exceeds the volume of exchange-traded electricity by almost twelve times. Therefore it is necessary to enhance transparency in the electricity trade, the report says. It points out that the agency is reviewing the publication of power plant data. “No electricity producer shall be able to manipulate the electricity market”, the press release says.

In the gas market, competition increased in 2009 due to far-reaching structural and regulatory changes. Most notably the number of market areas halved from twelve to six. Two of the new market areas Gaspool and NetConnect Germany seem big enough to provide a stable and liquid market with enough competition, the agency remarked.

As to the European perspective, the report emphasizes that market coupling in November linked Germany with France, the Benelux states and Scandinvia, creating a cross-border market comprising half of Europe.

Mr Kurth reiterated his call on customers to check the possibilities to switch the electricity and/or gas provider, pointing out the average savings potential.

Source: Bundesnetzagentur

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