Renewables Make German Power Market Design Defunct, Utility Says
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Electricity generation from renewable energy in Germany is reducing power prices and has left the country with a market whose design no longer works, according to Stadtwerke Leipzig GmbH.
Renewable generation, such as wind and solar, receives support from the German government in the form of a feed-in-tariff, or FIT. Because there are no costs associated with the wind and sunshine, renewables have a generating margin of zero, as well as legally mandated priority access to the grid. As a result, fossil fuel-fired plants are generating for fewer hours and selling their power at cheaper prices, making them less profitable.