German power prices reduced by electricity from renewable energy

Electricity generation from renewable energy in Germany is reducing power prices and has left the country with a market whose design no longer works, according to Stadtwerke Leipzig.

Renewable generation, such as wind and solar, receives support from the German government in the form of a feed-in-tariff. Because there are no costs associated with the wind and sunshine, renewables have a generating margin of zero, as well as legally mandated priority access to the grid.

As a result, fossil fuel- fired plants are generating for fewer hours and selling their power at cheaper prices, making them less profitable.