Michael Brächer et al., "How Bad Will the German Recession Be?" https://www.spiegel.de/international/business/energy-crisis-fallout-how-bad-will-the-german-recession-be-a-9e1f479e-5fef-4e62-b5ca-2f9e87b9bbca

[A recession will hit Germany, with consequences for many sectors. Main reason is high electricity prices and high natural gas prices. With regard to electricity production, the merit-order system at the electricity exchanges that covers and coordinates various electricity generating sources, creates such high prices that German industry stops being competitive against international suppliers. At the same time, high electricity and #energy bills hurt private households which react by cutting back on consumption. Even with the 6 #nuclear power plants connected to the grid, the costs for electricity would decrease only marginally as the merit-order of electricity generating sources spreads the price of the most expensive generation (natural gas) onto all other sources (#renewables, hard and lignite coal, nuclear).

I don't understand, though, why the exchanges not simply exclude natural gas from the merit-order. It would then leave coal as second most expensive source of electricity generation (and allocate its price to natural gas).

So there are two different topics: the physical supply of electricity, and the trading of electricity. The current problems seem to be related primarily to the second topic, not the first.]

#talkingtomyselflettingyoulisten