German Power Tumbles to Record Low as Solar Damps Demand

By Julia Mengewein – Jan 16, 2013 12:44 PM ET

Power for 2014 delivery in Germany and France dropped to records as rising solar output is expected to cut demand for other electricity sources.
German power, a European benchmark, fell as much as 1.5 percent, according to broker data compiled by Bloomberg. The equivalent French contract declined 0.3 percent.
Electricity for Germany next year lost 65 cents to 43.30 euros ($57.93) a megawatt-hour, it’s biggest decline since March 6, according to broker data compiled by Bloomberg. The French equivalent lost 15 cents to 46.20 euros.

As much as 18 percent of electricity demand may be replaced by solar panels not connected to Germany’s grid, reducing demand for other sources by 6 to 10 percent by 2020, Per Lekander, a Paris-based analyst at UBS AG (UBSN), said in a research note.

“The unsubsidized solar growth should drive wholesale power prices further down,” he said.

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