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Solar dash precedes winter concern

By Andreas Franke in London

November 21, 2012 - The rush to complete 10-MW+ solar photovoltaic projects before removal of feed-in tariff availability saw 981-MW added in September, according to data from federal grid regulator Bundesnetzagentur (BNA).

Year-to-date German PV installations now stand at 6.2 GW, bringing the grand total to 31 GW.

The country has a target of 52 GW, beyond which all new subsidies are to cease.

The strong September growth triggers a 2.5% monthly feed-in tariff cut for the quarter from November 2012 onwards.

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As such PV feed-in tariffs ranging from €0.135/kWh to 0.195/kWh are set to drop by 7.5% to end January 2013, Deutsche Bank said November 5.

The September race to complete saw the official opening of Germany's biggest solar PV plant, the 145 MW Solarpark Neuhardenberg, built on a former military airfield in Eastern Germany.

Radical impact

German solar capacity has tripled in less than three years, further squeezing gas-fired units already suffering from negative spark spreads.

With winter underway a stand-off has developed between the country's utilities and Chancellor Merkel's government.

Generators want to close loss-making power plants or be offered inducements to create a strategic reserve while the government is proposing legislation to prevent closures, albeit with some compensation.

The seeds of the solar boom were sown a decade ago by the SDP/Green coalition under Chancellor Gerhard Schroeder.

Germany’s initial plan to phase out nuclear was coupled with generous subsidies to support renewables. First wind boomed, reaching 22 GW installed by 2007.

Then solar started to take off, exceeding all expectations as panel prices fell faster than feed-in tariffs.

Today PV modules cost about a third of what they did two and a half years ago. Germany moved quickly to amend FiTs, but the boom has proved been hard to control.

Over the summer of 2012 solar began to have a real impact on power prices and the operational hours of conventional power plants.

Solar output for the first nine months was 25 TWh, a gain of 56% on nine months 2011 (German wind achieved 32.6 TWh). May and August were particularly strong months, with solar output at around 4 TWh in each.

On May 25 - a Friday - solar output peaked at 22.4 GW during midday hours.

The market effect was dramatic: day-ahead peakload prices fell below those for baseload power, with EPEX SPOT settling peak at €27.31/MWh and base at €28.89/MWh.

There were 19 days when peakload prices turned out below baseload during the second quarter, generally the best quarter in terms of sunshine hours. This compares to nine in 2011 and five in 2010.

The rise and rise of solar has relegated traditional peaking units to the so-called shoulder peaks in the morning and after sunset.

The effect is accentuated when the wind blows. On September 14 combined wind and solar output rose above 31 GW, equalling conventional plant production for a number of hours. Only strong cross-border demand prevented hourly prices from turning negative.

Next page: Winter reversal

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