In mid-August, Germany had its first normal workday on which peak power prices were below base prices, and futures prices are also down. Craig Morris provides an overview and warns proponents of renewables not to rejoice too soon at the demise of conventional power. On August 21, the price of power derivatives for Phelix (the power trading zone for Germany and Austria) was below four cents per kilowatt-hour for September 2013, Q4 2013, and 2014; for next year, power is already trading at only 3.648 cents per kilowatt-hour (see chart below). The four-cent threshold has become a buzzword since German energy giant RWE’s CEO famously said no profitability is possible below that price. Going forwards, conventional power producers in Germany therefore face bankruptcy – but we will come back to that topic later. Today, let’s stick to the numbers. On sunny weekends, it has not been uncommon for power prices at times of peak demand to be lower than baseload power prices (times of low demand). The situation marks a reversal of what’s expected; usually, … Continue reading German electricity getting cheaper on exchange