At this moment, solar and wind are the primary renewable energy sources for Germany. In 2012, the German capacity of solar energy passed the 32 GW mark. Together with the growth in wind power generation, this has depressed market prices.
In this article, we take a detailed look at how this is further going to shape future price levels. Whereas the market trades baseload and peakload products, we shift attention to the more detailed hourly price differences, reflected in hourly price forward curves (HPFCs). For example, we demonstrate that during day-time, an increase in the share of renewable production by 10 percentage points reduces power prices by 6.6%. During the night, the impact of renewables is even larger.
For this report we used fundamental modelling to develop the Hourly Price Forward Curves. Forward curve building means that the available forward market prices are transformed into a continuous and accurate curve. To read the full article:
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