German companies are increasingly buying electricity abroad. Although record prices remain in place in 2022 and wholesale electricity costs have fallen significantly across the EU, Germany is far behind its nuclear energy neighbors. The price difference between countries reaches almost one and a half times.
After the record prices of 2022, the average annual wholesale cost of electricity in European countries has dropped significantly, three or more times. However, for the first time significant differences appeared between the states themselves. For example, in France the average annual wholesale price in 2024 will be 48.6 euros per MWh, according to the NordPool exchange, while in Germany it will be 70.7 euros per MWh.
The difference of almost one and a half times is explained by the specifics of electricity production. If in France nuclear generation continues to represent more than 70% of electricity production, in Germany the proportion of wind and solar plants is growing, representing more than 65% of generation in the second quarter, and gas and coal production continues being quite expensive because the prices of these fuels have not returned to pre-crisis levels. Due to sanctions, countersanctions and the disruption of Nord Stream, the German market was left without Russian gas, and the rising share of LNG only supports higher prices.
As a result, German companies are looking for more affordable electricity, which they find in neighboring countries that have retained nuclear energy with fairly stable production prices. The last reactors in Germany were closed in April 2023.
It was then that Germany became a net importer of electricity and its purchases abroad only grew. Not only in France, but also in nuclear Belgium and Switzerland.
The German Ministry of Economy reported that in the second quarter of 2024, electricity imports increased by 18.4% compared to the April-June 2023 period, up to 18.1 TWh. As a result, the difference with exports increased to 11.1 TWh. This represents more than 10% of Germany’s electricity consumption in the second quarter.
The German department confirmed that German companies abroad are looking for more affordable electricity.
“The largest amount was imported from France (4,507.3 GWh), followed by Denmark (3,431 GWh) and Switzerland (3,020 GWh). Since France is, along with Germany, one of the largest electricity producers in Europe, most imports usually come from the neighboring country of Germany. The average wholesale price in France was 30.96 euros per MWh, significantly lower than in Germany.” – reported the Ministry of Economy.
The department also noted an increase in supplies from Belgium.
“The biggest change was in Belgium’s net imports, which increased by 431% to 1,247.1 GWh, driven by a 107.8% increase in gross imports and a 46% drop in gross exports. The main reason for this is the changing difference between prices in the two countries. “Compared to the second quarter of 2023, average wholesale prices in both countries decreased, but the decrease in Belgium (2023: €92.81/MWh; 2024: €54.44/MWh) was larger than in Germany.” – added the German department.
The specialized publication Carbon Credits believes that the difference is not only in the current price, but in the strategy, since “Germany lost another world war.” France also had no intention of being a nuclear power, they recalled. But it was forced to be this way after the oil crisis of the 70s. In less than 20 years, about five dozen nuclear power plant reactors appeared in the country, which began to provide the country with 75% of electricity.
In Germany, in 2010, we relied on renewable energy sources: solar and wind.
“By 2025, Germany will spend $580 billion on renewable energy sources and related infrastructure. Although CO2 emissions have decreased by only 2% since 2010, they should decrease by 6% each year until 2030, writes Carbon Credit. They noted that emissions in France remain significantly lower than in Germany, and the country earns an additional $3 billion by selling electricity abroad.
“In other words, the German Energiewende plan was the perfect counterresponse to the French Messmer plan. “It demonstrates whether energy security and a net zero emissions economy can only be achieved through green energy,” the publication adds. He cites one expert’s opinion that Germany has become an experimental laboratory for stopping nuclear power in a developed economy: “No country in the world has done this.”
