Nice! This is the first time i see anyone providing a quantitative answer to this. When the effect becomes more pronounced, it will hopefully remove political barriers for renewable electricity.
Note that "gas" in this context means natural gas, not gasoline
As noted in the methodology below, they are measuring the gas-implied level as the marginal running costs of a combined-cycle gas turbine plant: the price of the natural gas necessary to generate a given amount of electricity, plus the cost of the necessary carbon credits to burn that natural gas. Then they compare that to the actual electricity price
Nope. They pay more than they were with the "old" energy mix of more gas and nuclear.
Telling people it could be worse isn't really something to be proud of.
I personally now have solar panels on the roof and a heat pump so we only use electricity and don't rely on gas. Germany's strategy is really beneficial to households like my own. Unless you're relatively well off or on benefits, you're losing big time. The costs are constantly increasing with people telling others to just take money (you don't have) to install some solar panels on the house (you don't own) or buy an electric car (you can't afford).
Nuclear in 2006 was 160TWh. Coal in 2025 was 93TWh. So a big portion of nuclear would have been replaced by renewables by now anyways (natural gas has a different role in the grid and cannot be replaced bu nuclear).
Also a lot of coal plants have been / are used in district heating in addition to electricity. Replacing them is much harder and takes longer than nuclear which is electricity only. Shutting those down was never a short term option.
Calling it the worst decision ever is really funny, when it really is just a question of the order of the transition to renewables. And much of that order was dictated by technical needs.
Good for the Germans, in the UK we use marginal cost pricing, so consumers pay for the highest costing output regardless of how much if any they use. Means even if we get gas down to 1% well still be paying gas prices.
As others have pointed out the electricity price is only set by gas when gas is needed, but that's only part of your bill. Renewables now make up over half of UK electricity generation and they are financed through Contracts for Difference which are ultimately paid for by a supplier obligation levy on electricity bills.
When market electricity prices are lower than the strike price for a CfD, electricity users end up paying the difference through the levy and when the market price is higher it reduces the amount levied. So for the renewable portion of UK electricity generation we effectively pay the fixed strike price of the CfD whatever the market price.
This energy scam has been going on for more than 30 years in Europe and the UK.
The former Economic minister and professor Yanis Varoufakis explains [1].
My Fiberhood cooperative has a solution: the Enernet smart grid where you pay $0.01 per kWh. We wire up one in three houses or more in a neighborhood with power routers. People buy and sell only solar electricity from panels in the neighborhood, from batteries and from every ev charging station on every parking spot in the neighborhood and from every parked ev. Each participating house saves $2000 to $5000 per year for 30 years or more[2]. You also get free 25 Gbps internet. You heat your house with a heatpump or cool the house with an ice storage ac powered only by solar. If the cooperative makes any money the share the profit with all the members or they vote to buy more solar panels and batteries. The cooperative gives loans to houses that can not afford their own panels.
But it means you are simply exploiting the "normal" electricity grid this way by using it when your solar doesn't work and batteries run dry - that is, when the cost of elecitricty in a normal grid, with the high penetration of renewables, is highest. You do the normal capitalism thing: privatise the benefits, socialise the costs... And the higher proportion of renewables in the grid is the higher is your upside.
If you want to completely stop using normal grid and rely on solar alone, you will need to overbuild your solar so massively, you won't be able to afford it (and will run out of land, too). Cost of electricity produced will be several euros per kwh, and a simple calculation shows just how massively unrealistic it is.
They say $0.01/kWh is the target price, to be reached after some decades.
Don't get me wrong, I am excited about solar power but careful about the economics: the capital cost of solar right now is well over 1$/W (panels+inverters+installation/hookup) and even though it is falling nicely, the amortization schedule needs to be considered.
A rule-of-thumb figure is 1kWh of power per year from 1W nominal installed, so the capital cost will have to be amortized over 100 years to reach $.01/kWh. The installed price has to come down by a factor of 10 for this to work out.
When you say "power router," what product are you referencing specifically? I'm trying to search online to find a similar product but I don't think I'm finding the right thing.
For me personally it did not. I was a happy Tibber costumer until recently, meaning I was charged the quarterly hour spot price per kWh. The Iran War let to a significant jump in the price during the hours when renewables were low. I switched back to a traditional fixed price per kWh plan because of the high gas prices.
Decoupling of energy prices from fossil fuel is going to be spreading around the globe. It's not that hard to grasp. If you are spending non trivial percentages of your GDP on stuff that you burn once in exchange for some twh of energy delivered, lowering that significantly will have a notable impact on your trade balance.
Recent events in the middle east will have made a few countries keenly aware of how overly dependent they are on stuff coming from that region and how easily their economies are disrupted when stuff goes wrong there.
I live in Berlin, electricity is rather expensive here and people are not treating their gas dependence with enough urgency yet. The city is surrounded by flat country side with lots of wind mills and solar installations. Yet most apartment buildings in the city are still gas heated. Mine is no exception. I have to pay into fueling the gas boiler every month to the extent of about 150ish euro per month. Down from 250ish during the worst of the aftermath of the Russian gas pipeline shut down. I'd love my building to be switched to a heat pump. That's 1800 euro down the drain every year. I'll take a 30-40% cut on that please. It's technically very feasible and measured over 10-20 years, there should be a very clear financial payoff. Done right it should pay for itself probably within a decade. The building has about 20 apartments. Monthly gas bills are 2.5K based on yearly statements. Or about 30K. All out the chimney. That's one hell of a budget to tackle a bit of energy efficiency in the building.
But this is where Germany is its own worst enemy. We're talking a lot of vested interests. Nimby's somehow blocking the notion of literally saving money (as opposed to setting it on fire and chucking it out the chimney). A lack of incentives. A lot of bureaucracy, etc. Even the decision to stop building completely new buildings without a gas connection is somehow controversial in this country where gas is expensive. It is in the middle of a years long gas crisis of its own making and it can't get the decision to stop hitting itself with the proverbial hammer actioned.
A bit of system thinking could turn this around relatively quickly though. For example starting to think of this as investments with clear ROI as opposed to just cost would change the decision making and could also open up a lot of financing. Banks love investments with predictable ROI, for example. And Germany has an excellent credit rating.
However, Germany is grid locked on an irrational fear of financing and debt. It has very little of it relative to e.g. the US or even most other EU countries. It also has huge infrastructure problems. Addressing those requires investment. Investment requires financing. Investments have ROIs which should enable said financing. But that's where penny pinching politicians seem to have a mental block confusing investments for cost and consistently opting to "save cost" rather than to invest. And generally not seeing the forest for the trees.
But the picture is pretty clear. Switch most house holds to heat pumps while at the same time investing in cables, on/off-shore wind, a bit of solar on the side. With lots of battery storage. Etc. would do wonders for the amounts of gas it has to import at great cost. The country has millions of apartment blocks like mine using about 2-3x more energy than needed for heating. Almost all of it in gas form. A program to change those buildings could be executed in 10-15 years and break even in about the same time. It would result in many billions of savings in gas imports per year. That's the few percent of GDP that makes the difference between growth or recession. Germany has been in and out of recession for the last few years. Even powering that exclusively with gas fired electricity plants would yield substantial savings. And it already is transitioning to a grid that is mostly not gas powered. This should be a no brainer. But it somehow isn't. And that's just domestic...
You have to ask how much of it is subsidized, otherwise it's pointless. It's very easy to 'decouple' electricity price from natural gas if the government simply pays it with tax money (which is how it works in many asian countries where the electricity prices are less than one third of EU level.)
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[ 4.2 ms ] story [ 43.9 ms ] threadAs noted in the methodology below, they are measuring the gas-implied level as the marginal running costs of a combined-cycle gas turbine plant: the price of the natural gas necessary to generate a given amount of electricity, plus the cost of the necessary carbon credits to burn that natural gas. Then they compare that to the actual electricity price
Nope. They pay more than they were with the "old" energy mix of more gas and nuclear.
Telling people it could be worse isn't really something to be proud of.
I personally now have solar panels on the roof and a heat pump so we only use electricity and don't rely on gas. Germany's strategy is really beneficial to households like my own. Unless you're relatively well off or on benefits, you're losing big time. The costs are constantly increasing with people telling others to just take money (you don't have) to install some solar panels on the house (you don't own) or buy an electric car (you can't afford).
https://energy-charts.info/charts/energy/chart.htm?l=en&c=DE...
Also a lot of coal plants have been / are used in district heating in addition to electricity. Replacing them is much harder and takes longer than nuclear which is electricity only. Shutting those down was never a short term option.
Calling it the worst decision ever is really funny, when it really is just a question of the order of the transition to renewables. And much of that order was dictated by technical needs.
When market electricity prices are lower than the strike price for a CfD, electricity users end up paying the difference through the levy and when the market price is higher it reduces the amount levied. So for the renewable portion of UK electricity generation we effectively pay the fixed strike price of the CfD whatever the market price.
The former Economic minister and professor Yanis Varoufakis explains [1].
My Fiberhood cooperative has a solution: the Enernet smart grid where you pay $0.01 per kWh. We wire up one in three houses or more in a neighborhood with power routers. People buy and sell only solar electricity from panels in the neighborhood, from batteries and from every ev charging station on every parking spot in the neighborhood and from every parked ev. Each participating house saves $2000 to $5000 per year for 30 years or more[2]. You also get free 25 Gbps internet. You heat your house with a heatpump or cool the house with an ice storage ac powered only by solar. If the cooperative makes any money the share the profit with all the members or they vote to buy more solar panels and batteries. The cooperative gives loans to houses that can not afford their own panels.
[1] Best version with info graffics https://www.youtube.com/watch?v=R3bo-s_OY4Q or
Longer version https://www.youtube.com/watch?v=NicE0-N9ux0&list=TLPQMDcwNDI... or
short version https://www.youtube.com/watch?v=TaHepQyE37Q
[2] https://www.researchgate.net/profile/Merik-Voswinkel/publica...
If you want to completely stop using normal grid and rely on solar alone, you will need to overbuild your solar so massively, you won't be able to afford it (and will run out of land, too). Cost of electricity produced will be several euros per kwh, and a simple calculation shows just how massively unrealistic it is.
Don't get me wrong, I am excited about solar power but careful about the economics: the capital cost of solar right now is well over 1$/W (panels+inverters+installation/hookup) and even though it is falling nicely, the amortization schedule needs to be considered. A rule-of-thumb figure is 1kWh of power per year from 1W nominal installed, so the capital cost will have to be amortized over 100 years to reach $.01/kWh. The installed price has to come down by a factor of 10 for this to work out.
0:00-5:35 : ~ 0.32€
5:35-8:45 : ~ 0.38€
8:45-10.30 : ~ 0.30€
10:30-16:45 : ~ 0.18€
16:45-18:00 : ~ 0.31€
18:00-24:00 : ~ 0.34€
Recent events in the middle east will have made a few countries keenly aware of how overly dependent they are on stuff coming from that region and how easily their economies are disrupted when stuff goes wrong there.
I live in Berlin, electricity is rather expensive here and people are not treating their gas dependence with enough urgency yet. The city is surrounded by flat country side with lots of wind mills and solar installations. Yet most apartment buildings in the city are still gas heated. Mine is no exception. I have to pay into fueling the gas boiler every month to the extent of about 150ish euro per month. Down from 250ish during the worst of the aftermath of the Russian gas pipeline shut down. I'd love my building to be switched to a heat pump. That's 1800 euro down the drain every year. I'll take a 30-40% cut on that please. It's technically very feasible and measured over 10-20 years, there should be a very clear financial payoff. Done right it should pay for itself probably within a decade. The building has about 20 apartments. Monthly gas bills are 2.5K based on yearly statements. Or about 30K. All out the chimney. That's one hell of a budget to tackle a bit of energy efficiency in the building.
But this is where Germany is its own worst enemy. We're talking a lot of vested interests. Nimby's somehow blocking the notion of literally saving money (as opposed to setting it on fire and chucking it out the chimney). A lack of incentives. A lot of bureaucracy, etc. Even the decision to stop building completely new buildings without a gas connection is somehow controversial in this country where gas is expensive. It is in the middle of a years long gas crisis of its own making and it can't get the decision to stop hitting itself with the proverbial hammer actioned.
A bit of system thinking could turn this around relatively quickly though. For example starting to think of this as investments with clear ROI as opposed to just cost would change the decision making and could also open up a lot of financing. Banks love investments with predictable ROI, for example. And Germany has an excellent credit rating.
However, Germany is grid locked on an irrational fear of financing and debt. It has very little of it relative to e.g. the US or even most other EU countries. It also has huge infrastructure problems. Addressing those requires investment. Investment requires financing. Investments have ROIs which should enable said financing. But that's where penny pinching politicians seem to have a mental block confusing investments for cost and consistently opting to "save cost" rather than to invest. And generally not seeing the forest for the trees.
But the picture is pretty clear. Switch most house holds to heat pumps while at the same time investing in cables, on/off-shore wind, a bit of solar on the side. With lots of battery storage. Etc. would do wonders for the amounts of gas it has to import at great cost. The country has millions of apartment blocks like mine using about 2-3x more energy than needed for heating. Almost all of it in gas form. A program to change those buildings could be executed in 10-15 years and break even in about the same time. It would result in many billions of savings in gas imports per year. That's the few percent of GDP that makes the difference between growth or recession. Germany has been in and out of recession for the last few years. Even powering that exclusively with gas fired electricity plants would yield substantial savings. And it already is transitioning to a grid that is mostly not gas powered. This should be a no brainer. But it somehow isn't. And that's just domestic...