How the electricity market developed in 2020


Matthias Martensen

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Mins read

Renewable energies were once again stronger represented in the past year.

The share of renewable energies in electricity generation continues to rise steadily in Germany. While it was under 20% in 2010, it was already over 50% in 2020. Compared to the previous year, the share has grown by 5%. There has also been a change in the mix of conventionally generated energy. As the price of CO2 certificates has risen, it was no longer economically viable to generate electricity in many hard coal-fired power plants. At the same time, as the price of natural gas as a raw material has fallen and the CO2 cost of generating electricity from natural gas is lower, there has been a switch from hard coal to natural gas.

Pandemic also affects the energy sector.

Available data from the first half of 2020 reveal a decline in electricity demand. This is likely due to a reduced industrial production during the Corona pandemic. Especially during the first lockdown, numerous productions in Germany stood still or were throttled. While electricity consumption in Germany was still higher in February 2020 than in the previous year, the bdew statistics show lower electricity consumption in every month from March 2020. This decline was particularly significant in April and May.

The drop in demand also had an impact on the exchange electricity price. While the price of electricity plummeted in February through May, it slowly recovered starting in June.

Die Grafik zeigt, dass der Strompreis von Februar bis Juni stark sinkt.
Data source: Bundesnetzagentur

With a shift of jobs out of corporate offices and into workers' homes, the pandemic is also likely to show up on many people's private electricity bills.

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For more information, visit the Fraunhofer Institute, the Federal Network Agency and the bdew.

Image source Unsplash by NASA