Has electricity decoupled from gas prices in Germany?
4 hours ago
- #renewable energy
- #energy decoupling
- #electricity markets
- In gas-dominated electricity markets, gas-fired plants usually set electricity prices, linking them to gas prices.
- Decoupling occurs when zero-marginal-cost renewables displace gas from price-setting enough that electricity prices no longer track gas annually.
- The implied electricity price formula is: TTF gas × 1.8 + CO₂ price × 0.35, based on gas plant efficiency and emissions.
- A year is flagged as 'decoupled' if actual electricity prices are more than 20% below the gas-implied level.
- Data sources include Fraunhofer ISE for electricity prices, ICE/IEA for TTF gas, and EEX for CO₂ prices.
- Limitations include volume-weighted electricity prices favoring low-price hours and approximations in gas and CO₂ averages.