Due to the lower productivity of wind turbines, the price of electricity was higher this week. So far, the price increase has been limited, but analysts expect a stronger price increase this week. The wind speeds this week are lower than the average for this time of year. In addition, the cabinet announced its plans this week to phase out the net metering scheme for solar panels.
The electricity price was on the rise this week. On Monday, January 16, the price on the EPEX was €133,26. Only on Wednesday, January 18, the electricity price was slightly lower. The rate for a megawatt hour of electricity on that day was €131,80. On Monday, January 23, the electricity price was at the highest point of the week at €201,90.
The higher energy price is mainly caused by lower wind power. Two weeks ago, the electricity price was still between €75 and €100 due to the large production of wind turbines. During that period, the share of renewable energy in the Dutch energy mix was exceptionally high at 54%. As a result, the average electricity price was just above €100. This high percentage is mainly the result of the high wind force. Wind turbines were responsible for producing 41,8% of all Dutch electricity.
Last week the percentage of renewable energy was 38%. The share of wind turbines in the Dutch electricity mix almost halved in that week to 23,1%. Because the percentage of renewable energy is still relatively high, the increase in electricity prices has been limited so far.
This week the electricity price will continue to rise. Weather forecasts indicate that renewable energy production will decline further this week. According to the KNMI, the wind force this week is 20% below the historical average for January. As a result of the lower production of wind turbines, more energy will be generated from fossil fuels this week. It does not help that the gas price increased by approximately €10 per megawatt hour due to colder weather to just above €66.
To reduce the price of electricity, production from coal-fired power stations was increased slightly last week. The question remains to what extent this will make any difference. Although the Newcastle Coal benchmark has fallen by $100 since September, the price of coal is still historically high. The price for a ton of coal is currently around $350. Over the last five years, coal prices have typically been between $50 and $100.
Netting scheme for solar panels overhauled
Meanwhile, the Ministry of Economic Affairs and Climate presented this week their plan to phase out the netting scheme for solar panels. At the moment, the extra energy generated by solar panels is offset against previous consumption. The ministry plans to phase out this so-called netting. If it is up to the ministry, solar panel owners will be allowed to deduct 2025% of the electricity they generate from their consumption from 64 onwards. This percentage will be reduced by 2025% every year between 2031 and 9. In 2031, the netting scheme will be completely abolished according to the ministry's current plans.
The main reason for the policy change is that owning solar panels is now profitable even without the netting scheme. According to the Ministry of Economic Affairs, someone who has new solar panels installed will earn back the investment in seven years, even without the scheme. It is currently unclear whether the government can count on sufficient support to abolish the netting scheme.