A positive milestone for the market premium
More and more producers directly market their renewable electricity production on the wholesale electricity market. According to the latest figures from transmission system operators almost half of electricity from renewable sources is sold by producers directly on the electricity exchange and is thus fully integrated into the wholesale electricity market. This is a significant success for the market premium that was introduced eighteen months ago through an amendment to the Renewable Energy Sources Act (EEG) and complemented by the corresponding Management Premium Ordinance (Managementprämien-Verordnung) six months ago.
Federal Environment Minister Altmaier commented: "The Federal Environment Ministry has achieved what it set out to do with the introduction of the market premium last year. A large share of renewable electricity producers are now taking on the same responsibility in the market as operators of conventional power plants. It is now up to the demand side and the operators of conventional power plants to contribute to a more flexible electricity system."
The market premium balances out the difference between the traditional feed-in tariffs paid for electricity from renewable sources and the average spot market price. It is paid in place of the traditional feed-in tariffs. The market premium therefore offers incentives to feed electricity into the grid when demand is high – i.e. market prices are above average. In return, renewable energy producers that have opted for the market premium have to take on the same degree of responsibility as operators of conventional power plants. They sell their electricity themselves or with the aid of electricity traders on the competitive wholesale market, make their own forecasts and are responsible for the costs of balancing energy if they divert from their forecasts. Additionally, bioenergy producers participate in the balancing market. In this way they help to reduce the minimum level of feed-in from CO2-intensive conventional power plants (so-called must run) in the medium term.
At present around 70 companies and electricity traders are active in the direct sale of electricity from renewable sources on the electricity exchange.
Also, renewable energy producers now react to negative prices on the wholesale market by curtailing their power plants in case of significant negative prices. Most recently on June 16, when there was a surplus of electricity supply and electricity prices had fallen below zero euros per kilowatt-hour, more than 3 200 megawatts of renewable power plants - equivalent to the output of around 1 500 average modern wind turbines - curtailed production, leading to millions of euros in savings.
The Fraunhofer Institute for Systems and Innovation Research (Fh ISI), for Wind Energy and Energy System Technology (Fh IWES), the Institute for Climate Protection, Energy and Mobility (IKEM) and the Becker-Büttner-Held law firm have evaluated the experience with the market premium up to date on behalf of the Federal Environment Ministry.