Energy BrainBlog

Berlin, 15 October 2015: Each year on 15 October the German transmission system operators publish the EEG surcharge for the following calendar year. Energy Brainpool has been involved in the calculation now for the fifth time, forecasting the key market value factors of EEG electricity feed-in from wind and photovoltaics for the period 2016 to 2020.

As part of the annual forecast of the surcharge under the Renewable Energy Sources Act (EEG) undertaken by the four German transmission system operators, Energy Brainpool has been commissioned with the forecast of market value factors for photovoltaics and onshore and offshore wind power for the year 2016 and subsequent years to 2020. The market value factor represents the average value that electricity from renewable energy sources generates on the spot market for electricity. A market value factor of more than 1 means that the marketing of electricity generates above-average revenues.

The historic market value factor represents the basis for the forecast of market value factors for the years 2016 to 2020, and is calculated using the average revenues from EEG electricity feed-in in the EPEX spot auction and the average EPEX spot auction prices for the respective period under review

Figure 1: Illustration of the mathematical formula for calculating the market value factor (source: Energy Brainpool)

The calculation of the market value of electricity generation from regenerative power plants is based on the hourly electricity price scenarios of our own fundamental energy market model Power2Sim.

These market value factors are used in the context of forecasting the EEG surcharge in order to estimate the marketing revenue of electricity feed-in from renewable energy sources as well as payments to direct marketing systems eligible for support under section 34 EEG (market premium).

Figure 2: Forecasted market value factors 2016 to 2020 (trend scenario). Source: Energy Brainpool

The forecast of market value factors of renewable energy sources (Fig. 2) shows that the market value of electricity from wind and photovoltaic systems will continue to decrease until 2020.

The declining market value factors are primarily attributable to the increasing instalment of new wind and photovoltaic systems and the resulting increasing simultaneity effect (merit order effect). However, the comparison of market value factors within a given year also shows significant fluctuations. In particular, electricity generation from photovoltaic systems (Fig. 3) is by nature extremely seasonal. Whereas the market value of photovoltaic electricity falls during sunny periods, a higher market value is reached during winter months.

“Especially during periods with high levels of feed-in from renewable energy sources, the largely historically determined inflexibility in the electricity system leads to declining market values for wind and photovoltaic electricity,” explains Project Manager Thorsten Lenck. “The Energiewende, Germany’s energy system turnaround, must now increasingly take place in the area of flexibility.“ This will increase the market value of EEG electricity and lower EEG costs

Figure 3: Forecasted market value factors for 2016 (trend scenario). Source: Energy Brainpool

Using Energy Brainpool’s forecasted market value factors, the transmission system operators calculated the EEG surcharge. In 2016, the EEG surcharge for non-privileged final consumers amounts to 6,354 cent/kWh and is thus 0.18 euros higher than the EEG surcharge for the year 2015.

One of the factors causing the increase in the EEG surcharge is the falling electricity prices on wholesale markets. With regard to the consumer price of electricity, this price effect can counteract the increasing EEG surcharge if suppliers pass the low wholesale prices on to consumers.

Downlaod Calculation of EEG Surcharge: Market Value Factors 2016-2020