RWE has announced in their latest report on their first six months results (press release in German) that they plan to take 3.1 GW of fossil fuel generating capacity off the market.

The reason they give for that is that wholesale electricity prices are way down in Germany as a consequence of more renewable in the mix. They would be losing money if they needed to sell at these low prices. They don’t, since most of their business is fulfilling contracts from the past couple of years, which still have higher prices, but that effect will be gone soon.

Welt has an excellent article giving some background on this (in German).

They show an interesting graphic, which I hesitate to reproduce here for copyright reasons.

We learn from that: Prices have gone down from the mid term average of around EUR 55 a MWh to less than EUR 40. They estimate the minimum price necessary for gas generation as EUR 70, for coal as EUR 60, for lignite as EUR 45, and even for nuclear power after the plants have already paid back their investment as EUR 40, including a tax on nuclear fuel.

With prices below EUR 40 on the wholesale markets, operators like RWE may want to mothball their nuclear capacity even before they are required to do so by the 2011 law on the nuclear phase-out.

German Green Party Member of Parliament Hans-Josef Fell’s most recent mail newsletter has some very interesting comments on this development.

For one, he notes that this is great news. If RWE can’t even run fossil fuel power plants that have paid back their investment already at these low wholesale market prices, it follows that it doesn’t make any sense to start building new fossil fuel capacity now. Any new plant would need to earn back its capital cost, which is of course impossible.

He also notes how to deal with supply shortages. Under German law, the grid operators are legally liable to guarantee stability of supply. They will need to pay RWE or other owners of mothballed fossil fuel capacity for keeping their plants ready in case they are needed as backup on a windless November evening.

~http://www.rawstory.com/rs/2013/08/18/fossil-fuel-power-plants-to-be-shut-down-in-germany-because-theyre-no-longer-competitive/

This graph shows the profitability of Nuclear, coal and gas. German fuel prices have fallen massively in 4 years. 

~http://www.welt.de/wirtschaft/article119026755/DWO-Strompreise-cw-jpg.html

Currently Germany as a whole uses renewable for 18% of it's energy, while nuclear is 23%. With news like this renewable will likely get quickly adopted at least in Germany. Great news as cities like Munich pledge to rely only on renewables by mid century. It's great to see this as i really believe with enough investment and development, renewables will be our future in energy and the sooner this happens the better as they with nuclear will have to be our major energy sources as conventional energy sources start to run out for good. It's just sad to see my country the UK who seem to think fracking is such a good idea given all the problems it has caused in the US. Renewables aren't perfect but they seem to work fine for Germany, so why not everyone else?  

The renewable energies don't work fine for Germany, the only reason they're able to compete is because they're subsidized. The electricity prices keep rising and rising because of that and I predict there will be another big jump for next year. Unless our politics change we're headed for a major energy crisis in Germany. The biggest problem is that our politicians have barely any expertise when it comes to the topic of Energy. We don't even have a ministry dedicated to our energy politics (it's divided between the Environment Ministry and the Ministry of Economics).