Verena Dubois: What future price developments do you expect?
Jan Egidi: Future developments cannot be reliably predicted, of course, but it is interesting to see that while forward market prices for the coming years still maintain a comparatively higher level, they are slightly declining overall. Thus, the year 2023 is at 70 euros/MWh and the year 2024 already at 62 euros. The fact that prices are again trending downward here is probably related to the expansion of renewables. The more capacity is added, the lower the wholesale prices will inevitably be, because renewables offer their electricity at zero variable costs.
At the same time, however, we will also be taking German nuclear and coal-fired power plants off the grid in the coming years, which in turn will lead to a shortage of supply. The increasing demand for electricity due to the electrification of the transport sector will also play a role here.
Verena Dubois: Can you explain in detail how the price development affects the renewables industry?
Jan Egidi: For renewables, the current development is more than positive. They get the same wholesale price as conventional power plants, but they have no fuel costs. This means that while the costs of the competitors are rising sharply, their own costs remain constant or even fall. This is because it also becomes cheaper to build wind farms and solar plants. In this way, the competitiveness of renewables increases more and more. It becomes a real win-win situation when, in addition, high market prices occur. This also stimulates the construction of new plants – especially the realization of PPA projects outside the subsidy scheme.