The market position of the gas-engine co-generation supplying to the grid has further improved in the course of 2017 with regard to 2016. The overcapacity on the Dutch electricity market has structurally decreased by the decommissioning of coal plants and industrial co-generation plants. In the past winter there were also short lasting price peaks because of shortages abroad. In the medium to long term (2021) the situation will improve slightly by an improved spark spread, partly a result of decrease of overcapacity in Germany (decommissioning of brown coal) and moments of scarcity in France and Belgium. In the long term (2024) the situation still looks good, but risks of decreasing running hours and stricter CO2 and gas policy are increasing.
Deploying co-generation for own lighting remains profitable. Also for this application of co-generation there is insecurity as of 2024, but the effect is limited. The barometer position in February 2018 for co-generation with grid supply and for co-generation with supply to own company (lighting) is displayed above.
Market position 2018
The spark spread for electricity production has improved in the Netherlands because of the decreasing overcapacity and co-generation profits the most. A second effect is that there have to be continuous moments of scarcity in winter in Belgium and France causing price peaks. This situation is fairly beneficial for grid supplying co-generation and this situation will keep on till after 2020. The situation of generation that is running the lighting in the night hours, in combination with grid supply during the day, is profitable. For this form of co-generation, investing is still profitable.
Market position 2018
The spark spread for electricity production has improved in the Netherlands because of the decreasing overcapacity and co-generation profits the most. A second effect is that there have to be continuous moments of scarcity in winter in Belgium and France causing price peaks. This situation is fairly beneficial for grid supplying co-generation and this situation will keep on till after 2020. The situation of generation that is running the lighting in the night hours, in combination with grid supply during the day, is profitable. For this form of co-generation, investing is still profitable.
Market position 2021
The overcapacity in Germany will gradually decrease. This will lead to price recovery in 2021. This price recovery will also have effect on the Dutch market. Particularly in the first and fourth quarter the prices will recover somewhat. In the second and third quarter the prices will be under pressure during the day because of large scale generation by solar panels domestically and abroad. Investing in co-generation for grid supply is in general only just profitable until 2020, and is highly dependent on how it fits. With own use of electricity from co-generation the situation improves, depending on the proportion of own use and grid supply. Deploying existing co-generation for own lighting to avoid buying of electricity, and accompanying costs, remains very profitable. Investing in co-generation for own lighting is in general profitable. The risk of decreasing run hours for grid supply plays a limited role in lighting.
Perspective 2024
By 2024 the overcapacity in The Netherlands and Germany will disappear. Import from Germany will decrease as a result of the decommissioning of all nuclear power plants (('Atomausstieg' from 2018 till 2022) and could possibly lead to more and more export. The demand will increase due to economic recovery and electrification and the CO2 price will rise after 2020 due to adjustments to the trade system. As a result of the increase of sustainable generation there will be more spread in the electricity prices and running hours will come under pressure. Particularly in Q2 this will become noticeable. The yield however will increase during the 3,200 running hours with grid supply. After 2024 the running hours will be under pressure because of a larger production of sustainable sources. Co-generation for lighting remains in a good position. Running for lighting mostly remains profitable because of grid costs and energy taxes saved, and profit can be made from grid supply during hours with high prices on the electricity market.
By 2024 the overcapacity in The Netherlands and Germany will disappear. Import from Germany will decrease as a result of the decommissioning of all nuclear power plants (('Atomausstieg' from 2018 till 2022) and could possibly lead to more and more export. The demand will increase due to economic recovery and electrification and the CO2 price will rise after 2020 due to adjustments to the trade system. As a result of the increase of sustainable generation there will be more spread in the electricity prices and running hours will come under pressure. Particularly in Q2 this will become noticeable. The yield however will increase during the 3,200 running hours with grid supply. After 2024 the running hours will be under pressure because of a larger production of sustainable sources. Co-generation for lighting remains in a good position. Running for lighting mostly remains profitable because of grid costs and energy taxes saved, and profit can be made from grid supply during hours with high prices on the electricity market.
About the barometer
The barometer was developed as a part of the Kas als Energiebron project (greenhouse as energy source) commissioned by LTO Glaskracht Nederland and the Ministry of LNV. Energy Matters is an independent consultancy agency for energy saving and decentral generation with co-generation and sustainable energy. No rights can be inferred from this publication.
The barometer was developed as a part of the Kas als Energiebron project (greenhouse as energy source) commissioned by LTO Glaskracht Nederland and the Ministry of LNV. Energy Matters is an independent consultancy agency for energy saving and decentral generation with co-generation and sustainable energy. No rights can be inferred from this publication.