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Comment by cbmuser | Hacker News Reader

How are wind and solar cost-competitive when they can exist in Germany only with extreme high subsidies?

Look at the new windfarm called "Wikinger" that Germany built near the island of Ruegen: https://de.wikipedia.org/wiki/Offshore-Windpark_Wikinger

Cost: 1.4 billion Euros Lifetime: 20 years Power: 350 MW Max. capacity: 0.4 (40%) Price at the electricity stock exchange Leipzig: 36 Euro/MWh

Thus: 3500.42436520*36 = 883 million Euros

Result: 517 million Euros loss

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Then again the German government seems dead set on also subsidizing coal/gas by not internalizing their societal costs. So just removing those "subsidies" would already make wind/solar more attractive. Turns out, energy needs to be more expensive, and we should probably save energy.

> Cost: 1.4 billion Euros Lifetime: 20 years Power: 350 MW Max. capacity: 0.4 (40%) Price at the electricity stock exchange Leipzig: 36 Euro/MWh

Because wind farms have 0 fuel costs, they will operate at any price above a few eurocents per MWH. Which means once a critical mass of wind farms is operating in an area, the price frequently dives all the way to near 0. Sucks if you operate wind farms. Sucks less if you ALSO operate natural gas generators which you can then idle. And sucks a lot less if you're a consumer with dispatch able loads.

Why do you set a fixed price of 36 Euro / MWh for the next 20 years. At least take the phelix Futures to get a somewhat reasonable picture: https://www.eex.com/en/market-data/power/futures/phelix-de-f... (45€ Base / 53€ Peak). With the EU-ETS Certs getting more an more sparse and expensive over time, coal will be phased out more and more which will increase the price.

Germany already has the highest power prices in Europe. How much higher can this really go?

The turbines have grown and a lot of recent wind park bids are at a pretty competitive price without subsidies. https://cleantechnica.com/2019/09/23/uk-offshore-wind-prices...

Interest in Germany: ~0-1%, expected inflation: 1-2%, terminal value: X unknown (but not 0). Just adding these parameters would change the conclusion of your valuation model significantly. Secondly losses are not subsidies. Subsidies are what governments dole out, losses are for investors and companies.

I don't know the specifics, but there are subsidies in place through the EEG[0] to prevent such losses.

In general energy also seems to be a low-risk business, where if the energy companies would ever loose money, they are either already covered by the government or can sue the government for losses due to changed regulations with a good chance of winning.

[0]: https://en.wikipedia.org/wiki/German_Renewable_Energy_Source...

EEG Sites are phased out in favor of Direktvermartung though

> Lifetime: 20 years Power

Is that really the lifetime of the farm, or is it just when turbines need to be replaced?

What’s the difference

The platforms, towers and undersea cables are already paid for. Replacing one piece of the system isn't starting over. The math presented was of all return on investment ending at 20 years.

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