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electricity from gas-fired turbines? If so, gas prices doubled at essentially the same rate as the price of electricity on your first graph. Since such prices are set by almost monopolistic entities (at least when you consider the monolith of utilities and their 'regulators'), prices should trend similarly between the two energy sources.

That certainly accounts for the level price of electricity in the U.S., where the fall in gas price has raised the profits of utilities and the rate of investment in conversion to gas-fired generation.

paul spencer

by paul spencer (spencerinthegorge AT yahoo DOT com) on Wed Jul 3rd, 2013 at 05:31:49 PM EST
Good point, but I think the data indicates this is not too much of a factor. Rising European gas prices would surely affect production costs of electricity, but although gas-fired turbines are a significant contributor to Germany's electricity production, they're not dominant. The above numbers don't reflect a steep rise in the retail electricity price for German households - the numbers indicate the total costs have grown because of increasing surcharges plus taxation.
by Bjinse on Wed Jul 3rd, 2013 at 06:00:07 PM EST
[ Parent ]
although gas-fired turbines are a significant contributor to Germany's electricity production, they're not dominant

But for marginal pricing, the cost of the most expensive producer is what counts, whatever their share of full production.

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Thu Jul 4th, 2013 at 07:25:25 AM EST
[ Parent ]
Thanks, eurogreen also pointed this out, good to know. I asked him too: How can one determine possible effects of gas on the production price in Germany during the past ten years?
by Bjinse on Thu Jul 4th, 2013 at 07:36:23 AM EST
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According to this, a gas price of 3.5 €-cent/kWh results in a price contribution of 6 €-cent/kWh for a modern gas-fired plant. Taking into account older plants, let's assume a multiplier of two. According to the diagram below, most of the variability in consumer gas prices (violet line) originates in the import price at the border crossing (green line), so that should be true for gas for power plants, too.

This would mean that from 2004 to 2008, gas prices increased (rough estimate) 1.5 cents, thus the price of gas-fired power plant electricity increased 3 cents.

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Thu Jul 4th, 2013 at 08:25:48 AM EST
[ Parent ]

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