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Renewable Firms Rush to Secure German Projects as Mood Shifts

Mint

3 days ago

Business
Mint

Renewable Firms Rush to Secure German Projects as Mood Shifts

(Bloomberg) -- Developers of renewable energy are rushing to lock in German projects as Berlin's tone on the green transition shifts, sparking worries that strong government support may start to dwindle. High participation at two recent clean energy auctions shows that demand for such projects remains strong, the Federal Network Agency said Thursday. Yet analysts see the rush as a sign that companies are heeding the messages of conservative Chancellor Friedrich Merz's new government, which wants to put the brakes on the country's rapid renewable expansion. 'Many developers are rushing into the auctions now because they are aware of the existing conditions and the risk that these could worsen in the future,' according to Casimir Lorenz, managing director for Central Europe at think tank Aurora Energy Research. Germany boosted support for the green shift in the aftermath of the energy crisis sparked by Russia's war on Ukraine, in part by streamlining planning and permitting processes. But the rapid addition of new capacities has added pressure for expensive grid expansions and upgrades, with the new government looking to cut down on such costs for consumers. The auction results show that the past measures 'are having their full effect,' said Bärbel Heidebroek, president of the German Wind Energy Association. She urged the new government to maintain the course, with current discussions 'damaging an industry that is on course for success.' Economy minister Katherina Reiche, who is also in charge of the country's energy policy, said at a recent industry gathering that the rapid renewables expansion has led to massive grid growth and associated charges. She argued that renewables must develop more in line with the grid's needs — a view that has also gained traction in neighboring France — and expressed her intention to 'weaken the business case' of renewables. In line with that, Germany's energy regulator recently proposed making renewable generators contribute financially for getting hooked up to the grid. The debate about the role of clean energy will be guided by a study Berlin has commissioned on how much electricity demand Germany is likely to see in the coming years. A sluggish roll-out of electric vehicles, heat pumps and weak industrial demand have raised doubts that the country's current plan to double solar and wind capacity by 2030 is actually necessary. The economy ministry selected the groups in charge of this examination at the end of June and has asked them to limit their analysis to existing scientific findings and studies in light of a short deadline, the ministry said in response to emailed questions. It added that cost efficiency should be one of the study's key priorities. 'The given conditions make it difficult to obtain reliable results,' said Simone Peter, president of the German Renewable Energy Federation. The study's conclusions on future power demand are likely to serve as a universal reference for renewable developers and energy strategy. To Claudia Kemfert, who leads the energy, transport, and environment department of the German Institute for Economic Research, this and other signals 'indicate a shift in priorities' – away from the accelerated energy transition toward a more fossil-friendly approach, even though the government has committed to keeping the goal of climate neutrality by 2045. 'The currently high participation rates could also reflect a kind of 'gate-closing panic,'' she said of the recent clean energy auctions. 'The new political framework will significantly complicate or slow down the expansion of renewable energies.' More stories like this are available on

Britain to keep lights on with ‘gas-free' power grid for first time

Telegraph

16-06-2025

Business
Telegraph

Britain to keep lights on with ‘gas-free' power grid for first time

Britain's electricity grid operators will attempt to keep the country's lights on without burning gas for the first time ever this summer, In a potential glimpse of the future power system, the National Energy System Operator (Neso) – which manages the network – confirmed it was looking at 'potential opportunities' for a short period of gas-free generation later this year. If successful, it would make Britain one of the few industrialised countries to have run its electricity system without burning gas domestically. The quango, which is responsible for the day-to-day management of the grid, has set itself a target to achieve the milestone of operating the system free of gas for an initial 30 minute period at some point this year. In the longer term, the Government also wants at least 95pc of Britain's annual electricity needs to be met by renewables, nuclear plants, batteries or carbon-captured sources by 2030 – under its clean power action plan. 'Important proof of concept' Jacob Mandel, of Aurora Energy Research, said it was 'inevitable' that at some point the UK will be running its electricity grid with no contribution from gas for a short period of time. 'We've seen over the last few years gas use falling and falling, with more renewables built out in the UK and contributing to generation,' he said. 'There are still difficulties to get past, but it's inevitable at some point we'll see an hour or two when gas isn't running. That will be an important proof of concept for how the UK grid could look in the longer term.'

India set for electricity futures trading as NSE becomes 2nd exchange to get nod

Reuters

11-06-2025

Business
Reuters

India set for electricity futures trading as NSE becomes 2nd exchange to get nod

June 11 (Reuters) - India's National Stock Exchange ( opens new tab on Wednesday became the second exchange in a week to secure regulatory approval to launch electricity futures contracts, a move experts say could help struggling power utilities improve their finances. The Multi Commodity Exchange of India (MCX) ( opens new tab received a similar approval last week from the Securities and Exchange Board of India (SEBI). A futures contract will allow the purchaser to secure power at a fixed price at a later time. Currently, Indian utilities rely heavily on long-term power purchase agreements (PPAs) spanning up to 25 years for baseload requirements, supplemented with short-term purchases through power exchanges for peak demand. Distribution companies (discoms) in India owed about $9.5 billion in unpaid dues, according to the government, driven by expensive long-term power purchases, subsidised supply, and electricity losses due to poor infrastructure. "There is clearly an incentive from now on to not lock yourself into a 25-year contract and rather look at shorter terms," said Ashutosh Padelkar, Senior Associate at Aurora Energy Research. Globally, power derivatives are traded on CME Group (CME.O), opens new tab, Euronext, the Intercontinental Exchange and European Energy Exchange ( opens new tab, among others. "Discoms will gain the ability to use forward curves to plan procurement more dynamically... This can help optimize costs, avoid overcontracting, and improve demand forecasting," said Sanjeev Aggarwal, chairman of Hexa Climate Solutions. A forward price curve helps in predicting the expected electricity price in the future. Discoms currently sell solar surplus at low daytime prices, but can now use derivatives to sell at pre-agreed higher rates during that period. They can also buy electricity at lower prices during non-solar hours using the contracts, when spot prices typically surge. Even power producers can hedge by taking opposite positions in the derivative markets using the forward price curve, said Aditya Malpani, a senior director at power producer AMPIN Energy Transition.

AI boom risks pushing UK further away from 2030 carbon goals

Straits Times

05-06-2025

Business
Straits Times

AI boom risks pushing UK further away from 2030 carbon goals

Increasing electricity demand will not allow it to meet its end-of-decade goal for a clean power system. PHOTO: ST FILE LONDON - Britain is relying on a renewables expansion that is too slow to meet the booming power needs of data centres and risks missing its 2030 decarbonisation targets as a result. Regardless of whether the nation's data centre build-out maintains its current momentum or accelerates, increasing electricity demand will not allow it to meet its end-of-decade goal for a clean power system, market analytics firm Aurora Energy Research said in a report. That is because higher demand will likely need to be met with natural gas. Aurora said it is possible to avoid missing decarbonisation goals if the UK expands its grid and renewable infrastructure by more than what is currently planned. Tech companies across the globe are hungry for stable supplies of electricity, with gas-fired power plants often favoured due to their ability to meet 24-7 electricity needs. In the US, large firms such as Microsoft Corp. and Alphabet Inc.'s Google have reported soaring emissions amid higher energy use, while Meta Platforms Inc. signed a 20-year deal to buy nuclear power. Aurora sees data centre demand reaching as much as 10 per cent of total UK power demand by 2030, up from 4 per cent in 2025. The UK government is keen to tap into the economic growth offered by the data centre sector, but has also set out clear green goals around its power system. BLOOMBERG Join ST's Telegram channel and get the latest breaking news delivered to you.

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