(Bonn / Berlin) – The Federal Network Agency and the Federal Cartel Office have published the 2021 monitoring report on developments on the German electricity and gas markets. The data analyzes primarily refer to the year 2020, but also reflect the first quarter of 2021 and more current trends in terms of price developments.
Feeding in hydrogen
The report also provides figures on green hydrogen and synthetically produced methane. Both are subsumed under “biogas” if they can be proven to have been produced “largely from renewable energy sources” (Energy Industry Act, Section 3 No. 10c).
According to this definition, seven plants fed hydrogen and two plants fed synthetically produced methane into the natural gas network in 2020 (as of December 31.12.2020, XNUMX). 
However, with an energy amount of 2,8 million kilowatt hours of hydrogen and 0,3 million kilowatt hours of methane, these energy sources only accounted for 2020 percent of the total amount of biogas fed in in 0,031, according to the report. Systems that feed in hydrogen have a cumulative connected load of 11,3 megawatts of electricity (MWel), those that feed in synthetic methane have a connected load of eight MWel. There are also “a whole series of other plants, which, however, do not feed the gas produced into the natural gas network,” according to the authorities. Most of them are demonstration and research facilities. In many cases, exact information about the technical specifications is not known. The total number of power-to-gas systems currently in operation - including those feeding into the gas network - is estimated at around 40, and the total system output is more than 60 MWel.
Networks and network expansion
The Gas Network Development Plan 2020-2030 (NEP Gas) includes a total of 215 measures with an investment volume of around 8,5 billion euros. A total of 2018 new measures have been added compared to the NEP Gas 2028-60. The additional proposed measures would largely be related to planned liquefied natural gas plants, the necessary expansion measures for green gases, supply in Baden-Württemberg and security of supply in the Netherlands, Switzerland and Italy. The Federal Network Agency also enables the development of a hydrogen infrastructure. Accordingly, a total of 24 lines or gas pressure control and measuring systems in the natural gas network were identified that are no longer necessary for natural gas transport and could be converted to hydrogen.
This enables the gas transmission system operators to immediately set up a hydrogen network without neglecting their transport tasks in the natural gas network. According to the regulations that came into force as part of the amendment to the Energy Industry Act (EnWG) in July 2021, the transmission system operators could also indicate in the NEP Gas the lines that can be converted to hydrogen.
There is a great need to build a hydrogen infrastructure
For the scenario framework for the NEP 2022-2032, the transmission system operators (TSOs) carried out another market survey about the need and supply of hydrogen to plan the development of a hydrogen infrastructure. Around 500 project reports were received.
Decarbonization and the phase-out of fossil fuels also pose major challenges for the natural gas network, the report says. The exit has been decided for 2045, but the path to get there has not yet been politically decided. According to the BNetzA, the TSOs were already planning in their plans to “use a large part of the existing long-distance pipeline infrastructure for the transport of pure hydrogen in the long term in order to enable the use of decarbonized gases”. For this purpose, the TNB would identify lines as part of the NP-Gas process that could be removed from the natural gas network and repurposed for the possible transport of hydrogen without affecting the security of supply or natural gas transport task.
Natural gas as a bridging technology
In the short and medium term, natural gas should accompany the transformation as a bridging technology. This transition process is “a challenge” for security of supply. The pipeline system should be converted to transport pure hydrogen while simultaneously supplying the (remaining) natural gas customers with as little network expansion as possible. In the future, two networks would be operated in parallel.
The future use of hydrogen in the distribution network area is not yet foreseeable. Furthermore, more gas could temporarily be used as fuel for additional peak-load power plants in electricity generation. These power plants should be used rarely, but should be ready for use when needed. The gas network must be able to ensure the gas supply to these power plants at all times, “regardless of what transport task it otherwise has to fulfill.” Depending on the location of the power plant, this could lead to a network expansion that may only be needed for a few years.
Monitoring report: Further key data summarized
- Decline in conventional electricity generation: The ban on coal-fired power generation came into force in July 2021 for the first hard coal-fired power plants, while the last nuclear power plants will be shut down in 2022. As the 2021 monitoring report documents, electricity generation from non-renewable energy sources recorded a significant decline of 2020 percent in 11,6. In particular, generation in coal-fired power plants fell sharply in 2020 for the second year in a row. The decline in electricity generation for hard coal was around 25 percent and for lignite around 20 percent.
- Development of renewable energy sources: Electricity generation based on renewable energy sources increased slightly by 2020 percent in 3,4, particularly due to the further expansion of photovoltaic and wind turbines. The share of electricity from renewable energies in gross electricity consumption rose to 45 percent. In 2020, the expansion goals in the areas of solar radiation energy, onshore wind energy and offshore wind energy set out in accordance with the Renewable Energy Sources Act (EEG) were achieved.
- Wholesale prices: The development in wholesale electricity and gas prices during the early phase of the pandemic was offset by a significant price increase by the end of 2020, which continued in 2021. On the respective end customer markets, the combined market shares of the four highest-selling electricity and gas suppliers were “well below the legal presumption thresholds for a dominant market position”.
- Electricity prices for end consumers: As of April 1, 2021, electricity prices for household customers had risen by around two percent compared to the previous year. An increase in electricity prices was also observed among commercial and industrial customers. For the first time in ten years, the average electricity prices of household customers who chose non-basic suppliers were below the prices of alternative suppliers.
- Gas prices for end consumers: The gas price for household customers rose by around six percent as of April 1, 2021. Among non-household customers, the increase was around 4,8 percent for commercial customers and around 16,6 percent for industrial customers. Since the legal regulation provides for a gradual annual increase in CO2 pricing until 2026 and also due to the significant price increases on the wholesale markets in the second half of 2021, a further increase in the price of gas is to be expected in the following years.
- Change of supplier: In 2020, a new record level was reached with around 5,4 million household customers switching suppliers. There was also a new high in the gas sector with around 1,6 million supplier changes.
- Delivery block: In order to dampen the financial consequences of the corona pandemic for end consumers, the right to refuse performance was expanded in the first half of 2020. Among other things, this led to the number of power cuts falling by around twenty percent in 2020 and the number of gas cut-offs by around 22 percent. In addition, the energy suppliers were accommodating. In 2020, around three quarters of them at least temporarily refrained from blocking defaulting electricity and gas customers.
The 2021 monitoring report from the Federal Network Agency and the Federal Cartel Office is available here Download free as PDF (540 pages).
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Monitoring report 2021 © Federal Network Agency
