DOXA falsification
DOXA 1
We are having a massive rise in Natural Gas prices in Europe
Data:
DOXA 2:
Renewables will make the power price expensive.
DATA
The Spain falsifies this doxa.
Natural gas sets the price for less than 15% of the time now (renewable saturation)
RESULT
DOXA 3:
More renewables will push the price of electricity higher in Germany
DATA
Q1 2026 Snapshot: German wholesale electricity prices fell by 8.9% in the first three months of this year compared to Q1 2025, largely driven by a 27% surge in wind generation that displaced expensive gas-fired plants.
The price-lowering "merit order effect" that can be seen Spain has already begun to emerge in Germany, though it is currently more seasonal and volatile.
Market analysts expect a broader, structurally lower price environment—similar to Spain's "decoupled" state—to take firm hold by late 2026 and 2027
The renewable pricing mechanism
Fossil Influence: In Spain, fossil fuels now set the price in only 15–19% of hours. In Germany, this figure was still around 35% in 2025. As Germany adds its projected ~30 GW of capacity this year, the number of "gas-set" hours is expected to drop significantly.
SOURCE
Why more wind power lowers electricity prices - merit order on the electricity exchange
The expansion of wind energy also had a noticeable impact on electricity prices in Germany in 2026: the average wholesale electricity prices fell to 10.2 cents per kWh between January and March (previous year: 11.2 cents per kWh). This corresponds to a decrease of 8.9 percent.
The more renewable energy displaces expensive gas-fired power plants, the lower the clearing price becomes - and electricity prices fall. Conversely, if the use of expensive power plants increases, electricity prices on the exchange - and ultimately for consumers - also rise.
Marginal Pricing
Marginal cost of renewables are very low, so the wholesale price plunges with more renewables.
Yes there is a cfd that is paid, but the economic multiplier is very large on lower electricity prices, and it enables a country to manipulate your terms of trade competitiveness.
https://www.eurelectric.org/in-detail/marginal-pricing-the-key-to-efficient-electricity-markets/
Timeline for the “Spanish Effect” in Germany
Why is Germany “Slower” than SPain
- Industrial Load: Germany has a much higher and more constant industrial demand, which still requires "firm" power from gas or coal when the weather is calm.
- Grid Bottlenecks: Unlike the "Iberian Island," Germany is at the heart of the European grid. While it exports cheap green power, it often must import expensive fossil power from neighbors to maintain stability until its own storage and north-south transmission lines are finished.
- Carbon Pricing: Germany still relies more on coal than Spain. Rising EU carbon prices (around €75/ton) keep the "ceiling" for German electricity prices higher than Spain's for now.
https://www.sciencedirect.com/science/article/pii/S0301421524004683
Result:
You can expect a noticeable plunge in average wholesale prices starting late 2026, but total "decoupling" from gas will likely require the higher storage capacities and grid completions planned for 2027–2030.
Storage Capacity Growth:
As of early 2026, Germany’s total stationary battery storage capacity has grown to approximately 27.23 GWh, representing a year-over-year (YoY) increase of roughly 50%.
The market is currently experiencing its most rapid expansion in history, fueled by a record-breaking March 2026 where over 1 GWh was added in a single month—the highest monthly growth ever recorded for the country.
YOY Growth by Market Segment (2025 vs. 2026)
The growth is shifting from residential dominance toward massive utility-scale expansion.
- Utility-Scale (Large-Scale): This is the fastest-growing sector, with capacity additions nearly doubling YoY. In 2025 alone, additions were 81% higher than the previous year, and the trend has accelerated into 2026.
- Commercial & Industrial (C&I): This segment recorded steady growth of approximately 47% in 2025, driven by industrial companies using storage for peak shaving and optimizing self-consumption.
- Residential (Home Systems): While still the largest overall portion of the fleet (~80%), new installations in this segment actually saw a slight decline of roughly 6.4% in 2025 compared to the previous year. However, interest remains high with 45,000 new systems added in March 2026 alone.
Key Drivers of the storage "Tsunami"
- Price Volatility: Germany recorded over 575 hours of negative electricity prices in 2025, creating a massive incentive for battery operators to buy cheap power and sell it during peaks.
- Falling Hardware Costs: Prices for LFP (Lithium Iron Phosphate) technology have fallen by more than 75% since 2010, significantly shortening the payback period for investors. (Even cheaper Sodium Batteries are coming)
- Policy Support: New regulations, such as the 20-year exemption from grid fees for systems commissioned before August 2029, are major economic drivers for current projects.
THE TYPES OF TECHNOLOGY:
These projects use the "molten salt" and "sand" technologies to provide seasonal or industrial-scale heat and power.
- The "AirBattery" (Salt Cavern Storage):
- Status: First commercial plant nearing final preparation as of early 2026.
- Technology: Uses surplus energy to compress air into deep underground salt caverns. It is released through water chambers to spin turbines, storing between 3 and 8 GWh per cavern—enough to power tens of thousands of homes for weeks.
- Sand Batteries:
- Status: Actively being introduced to store renewable power as heat for long winters.
- Technology: Excess electricity heats sand to 500–600°C in steel silos. This heat is then fed into district heating networks or industrial facilities.
- Molten Salt Thermal Storage:
- Status: Projected to see a 10.6% CAGR starting in 2026.
- Technology: Research centers like the German Aerospace Center (DLR) are piloting plants using solar salt (potassium/sodium nitrate) that can hold heat for days up to 7-14.
Major Utility-Scale Battery Projects (2026 Focus)
Large investors are repurposing former fossil and nuclear sites to take advantage of existing grid connections.
- RWE (Neurath & Hamm): Completed a massive 220 MW system using 690 lithium-ion blocks at existing power plant sites to stabilize the grid.
- NGEN & Uniper (Wilhelmshaven): Broke ground in April 2026 on a 50 MW / 100 MWh BESS at a former thermal plant site, scheduled for commissioning in Q4 2026.
- TotalEnergies: Investing €160 million in six German sites totaling 221 MW, with completions expected by early 2026.
- Akaysha Energy & Copenhagen Energy: Signed a deal in April 2026 to develop a multi-GW pipeline of "mega-scale" battery sites across Germany.
- Volkswagen (Salzgitter): Launched its first major 20 MW / 40 MWh system in March 2026 as part of its shift into energy services.
Key Projects in 2026
Several commercial-scale thermal storage plants are coming online or scaling up this year to prove this 14-day storage capability:
- Kyoto Group "HeatCube" (Denmark/Germany): The first modular 18 MWh system at Nordjyllandsværket is now fully operational. It stores heat at 415°C to provide constant district heating even when the wind stops for days.
- Hyme Energy (Denmark/Germany): Using innovative molten hydroxide (which is cheaper than nitrate salts), Hyme is scaling up its first 100 MWh facility in 2026. Their goal is to store energy at up to 700°C for industrial steam generation.
- MOSS Project (Aalborg University): A large-scale project aimed at building 1 GWh+ storage plants that specifically target a 2-week storage duration to bridge typical weather-induced supply gaps in Northern Europe.
By retrofitting old coal plants with these salt tanks, Germany can replace the coal boiler but keep the rest of the infrastructure, turning a "polluter" into a massive, 14-day green battery.
Cost Comparison: Molten vs. Lithium-Ion (2026)
The "Near-Zero Power" Strategy
When electricity prices plunge near zero, the economics shift heavily in favor of molten salt for large-scale grid stabilization:
- Fuel Cost Independence: Because the "fuel" (excess renewable power) is essentially free, the thermal system's lower efficiency (losing ~50% of energy during conversion back to electricity) is financially negligible.
- Arbitrage at Scale: A molten salt system like Kyoto Group's HeatCube can charge for pennies and discharge when gas/coal prices set the market at €100+ / MWh.
- Capex Efficiency: For durations exceeding 8 hours, molten salt costs can be up to 33 times cheaper per stored kWh than lithium-ion.
Industrial Heat vs. Grid Power
The cost per MWh depends heavily on the output form:
- As Industrial Heat: If the molten salt provides steam directly to a factory (e.g., KALL Ingredients), efficiency is 90%+, making it the cheapest decarbonization tool available.
- As Grid Electricity: If converted back to power via turbines, costs are higher due to the hardware needed for the "power block" (turbines, generators).
Key Project Locations:
- Nordjyllandsværket: Site of the first commercial HeatCube.
- Wilhelmshaven & Neurath: German sites currently converting from fossil to large-scale storage hubs.
Molten Salt & Thermal Storage (The "Heat" Advantage)
If the system is used for Industrial Process Heat (like the Kyoto Group HeatCube), the payback is much faster because the efficiency is nearly double that of power-to-power systems.
- Payback Time: 4 to 6 years.
- Why it's faster: These systems reach >93% efficiency when providing steam. By charging with "near-zero" priced power during renewable peaks and replacing expensive natural gas, industrial users can save enough to recover costs quickly.
- Government Boost: New 2026 subsidies for long-duration storage (≥10 hours) can reduce initial investment by up to €15 million per project, shortening the payback period by an additional 2–3 years.
2. Lithium-Ion Battery Storage (Grid Arbitrage)
For systems designed primarily to buy and sell electricity on the market (arbitrage), the economics are different.
- Payback Time: ~3 to 5 years.
- Revenue Drivers:
- Arbitrage: Charging at "near-zero" and discharging when prices are high (often set by expensive gas plants).
- Ancillary Services: Providing "frequency regulation" to keep the grid stable generates high annual income (e.g., €120,000 per MW).
- Investment Cost: Roughly €500,000 per megawatt for a standard system, with annual revenues estimated at €170,000 to €270,000 per megawatt.
3. Sand Batteries (Long-Duration Heat)
Innovations like the Augsburg Sand Thermal Battery are now achieving even lower costs for seasonal storage.
- Cost Advantage: At just €12 per kWh of capacity, sand storage is roughly 90% cheaper than lithium-ion for equivalent scale.
- Payback: While exact commercial payback varies by site, the ability to store summer solar energy for winter heating (losing less than 0.1% heat per day) offers a radical reduction in gas dependency.
Summary of Payback & ROI (2026 Estimates)
Electricity Production: Sand vs. Molten Salt
While both technologies use heat to drive a turbine, they have different efficiency profiles and temperature ranges:
- Conversion Efficiency:
- Molten Salt: Typically achieves ~40–45% efficiency for electricity generation.
- Sand: Current P2H2P prototypes like Polar Night Energy's Sand-to-Power Pilot target an electrical efficiency of 30–35%, though this can reach 90% in combined heat and power (CHP) modes where waste heat is also utilized.
- Temperature Ranges:
- Molten Salt: Limited to roughly 565°C–600°C before the salt begins to decompose.
- Sand: Can technically reach over 1,000°C. Research by NREL uses specialized sand heated to 1,200°C to drive high-efficiency air-Brayton combined cycle turbines.
- Cost & Durability:
- Sand: Costs roughly $10–$20 per kWh and does not freeze or degrade.
- Molten Salt: More expensive (nitrate salts are often fertilizers) and can "freeze" if temperatures drop below ~220°C, potentially damaging pipes.
Key Electricity-Generating Sand Projects (2025–2026)
- Valkeakoski Pilot (Finland): A Sand-to-Power pilot project launched in late 2025 to test next-generation sand batteries operating at significantly higher pressures and temperatures to validate grid-scale electricity output.
- NREL Particle TES: The National Renewable Energy Laboratory is testing sand-based storage that holds heat for up to 100 hours specifically for electricity generation, aiming for a 50% round-trip efficiency.
- German Commercial Sites: Germany has recently approved sites targeting 4 GWh of seasonal sand battery storage by 2030, which may include electricity-generating capabilities as the tech matures.
The Bottom Line: For generating only electricity, molten salt is currently more mature and efficient. However, sand is becoming the preferred "long-duration" choice because it is nearly 10x cheaper than chemical batteries and allows for much higher temperatures, which could eventually lead to more efficient electricity generation.
Below in orange research centers, and in blue operating facility using sand for energy storage.
The Future of power production efficiency from sand storage
While molten salt is currently limited to about 565°C (any higher and the salt decomposes), sand is chemically stable even at 1,200°C. This massive temperature jump is exactly what will drive electricity efficiency higher in the coming years.
Here is how that higher temperature translates to better power output:
1. The Efficiency Equation (Carnot Limit)
In thermodynamics, the efficiency of a heat engine (like a turbine) is directly tied to the temperature difference between the heat source and the cooling environment.
- Molten Salt (~560°C): Maxes out at around 40-45% electrical efficiency using standard steam turbines.
- High-Temp Sand (~1,000°C+): Can potentially reach 50-60% electrical efficiency by using Combined Cycle systems (gas turbines followed by steam turbines) or specialized supercritical cycles.
2. Smaller, Cheaper Turbines
Because sand can hold so much more energy per cubic meter at 1,000°C than salt can at 500°C, you need much less material to store the same amount of power.
- High-temperature heat creates high-pressure gas or steam more effectively, allowing for smaller, more efficient turbines that are cheaper to build and maintain.
3. The "Heat Reuse" Multiplier
The real magic happens when you don't just produce power. In a Combined Heat and Power (CHP) setup:
- Stage 1: High-temp heat drives a turbine to make electricity (35-45% efficiency).
- Stage 2: The "exhaust" heat—which is still very hot (200-300°C)—is then sent to a district heating network or industrial plant.
- Result: Your total system efficiency jumps to 90%+.
Current Research Focus (2026)
The NREL (National Renewable Energy Laboratory) and startups like Polar Night Energy are currently testing:
- Air-Brayton Turbines: These use hot air directly from the sand to spin a turbine, avoiding the complexity of water/steam pipes.
- Fluidized Beds: Blowing air through the sand to make it "behave like a liquid" so it can be pumped through heat exchangers more efficiently.
Summary: We are moving from a "heat-first" sand battery toward a "power-on-demand" sand battery. The high temperature isn't just a hint; it's the physical requirement to make sand competitive with lithium-ion for grid-scale electricity.
Who is more in Research and who is more Production
While NREL is doing impressive lab work, Europe is already operating "industrial-scale" facilities that prove the concept in the real world. As of early 2026, Europe accounts for nearly 48% of the global sand battery market, largely because its existing district heating networks make it easy to plug in thermal storage.
The Practical Result
- Europe is already at a stage of "relief on imports" because their Operational 600°C systems are displacing natural gas in city heating networks today.
- The US is aiming to leapfrog the efficiency of current systems by staying in the Lab until they can hit that 50% electrical efficiency mark, which makes the "Power-to-Power" cycle more competitive with lithium-ion.
By the time the US Lab tech is ready for the market, Europe will likely have the infrastructure and grid connections already established from their 600°C/850°C rollout.
Industrial buyers of thermal storage
German industrial sectors are aggressively signing up for thermal storage in 2026 to decouple their energy costs from volatile natural gas and electricity prices. The early adopters are industries that require continuous, low-to-medium grade process heat (steam and hot air).
https://thedailyexplainer.com/sand-battery-energy-storage-guide/
Key Sectors Signing Contracts in 2026
- Food and Beverage (e.g., Breweries & Frozen Food): This sector is leading the operational rollout. German breweries, which need constant heat for boiling wort, are installing systems like sand batteries to charge with cheap overnight wind power and run daytime production. Major fresh and frozen food producers are also adopting thermal batteries to maintain quality while bypassing high energy peaks.
- Pulp and Paper: As one of Germany's most energy-intensive sectors, paper mills are signing long-term renewable PPAs paired with thermal storage. For example, UPM has transitioned its Schongau mill to 100% renewable electricity, using storage to manage heat electrification.
- Chemicals: The chemical industry is utilizing thermal storage to provide "firm" green heat for high-temperature processes that were previously dependent on gas. Companies in this sector are participating in the German government's Carbon Contracts for Difference (CCfD) to bridge the price gap for these new storage technologies.
- Building Materials (Steel, Cement, & Glass): These "hard-to-abate" sectors are moving into the pilot-to-operational phase. They use higher-temperature storage (often targeting the 850°C range) to replace fossil-fueled kilns and furnaces.
Economic Incentives for Adoption
- Grid Fee Exemptions: Systems commissioned before August 2029 benefit from a 20-year exemption from grid fees, a massive driver for the 2026 storage boom.
- Climate Contracts: The German Ministry of Economy is launching a €6 billion tender in mid-2026 for industries like steel and paper to support the implementation of heat pumps and thermal storage.
- Arbitrage: With over 575 hours of negative electricity prices annually, industrial players are using sand and salt batteries to essentially get paid to charge their "heat silos".
The Seasonal "Top-Up" Strategy
- The Summer Charge: During June and July, solar power in Germany often hits massive surpluses, pushing prices to zero or negative. Sand batteries soak up this "free" energy, reaching temperatures of 600°C–800°C.
- The "Slow Decay": If you didn't touch the battery for three months (90 days) and lost 0.1% per day, you would still have roughly 91% of your heat left by October.
- The Autumn "Wind Boost": October and November bring the first big Atlantic storms. These high-wind periods provide a massive injection of cheap power. Instead of starting from zero, you are "topping up" a tank that is already 90% full.
- The Winter Discharge: When the "Dunkelflaute" (the dark, windless doldrums) hits in January, you have a massive, fully charged thermal reservoir to heat homes and run industrial steam lines for weeks without needing much natural gas.
Why Sand is better for thermal storage than Salt
- No "Freeze" Risk: Molten salt must stay above ~220°C or it solidifies and breaks the pipes. If you leave a salt tank for months, you have to spend energy just to keep it liquid.
- Passive Safety: Sand just sits there. If you stop the fans, the heat stays trapped in the center of the silo by the surrounding sand, which acts as its own insulation.
The Economic "Win"
By using this strategy, German industrial players avoid the "Winter Price Peak." Historically, gas and electricity prices skyrocket in January. By "banking" summer solar and autumn wind, factories can run on energy that cost them nearly €0 to acquire six months prior.
For a medium-sized German factory—such as a food processing plant or small paper mill—switching to a summer-to-winter thermal storage strategy can save roughly €1.35 million per year in energy costs.
By using seasonal storage, a business can cut its ongoing energy expenses by up to one-third compared to relying on natural gas.
Example of Savings with Thermal Storage
https://www.bayern-innovativ.de/en/emagazine/detail/great-savings-potential-for-process-heat
Key Financial Drivers for 2026
- Arbitrage Profits: Industrial players are capitalizing on negative electricity prices (over 575 hours annually) to essentially get paid to "refill" their heat tanks.
- Payback Period: With annual savings of over €1 million, a large-scale sand battery system (estimated at ~€4M capital cost) can achieve a full return on investment in less than 3 years.
- Decoupling from Gas: In 2025, summer gas refill prices have remained stubbornly high, making the seasonal "solar-to-sand" strategy even more attractive as it avoids the expensive summer gas market entirely.
- Government Subsidies: New tenders from the Federal Ministry for Economic Affairs offer up to €15 million in support for long-duration storage projects, which can effectively bring the initial investment cost down to nearly zero for qualifying factories.
https://www.bayern-innovativ.de/en/emagazine/detail/great-savings-potential-for-process-heat
Efficiency Impact
Because these systems provide direct process heat, they operate at 90%+ efficiency, far higher than if they were trying to generate electricity. For drying processes or boiling in the food industry, this replaces natural gas with a cheaper, more stable alternative that is immune to geopolitical supply shocks.
CONCLUSION
The "Baseload" Attrition Spiral
As Germany adds 30 GW of renewables this year, gas plants are being forced into a "peaker" role.
- Low Utilization: Instead of running 8,000 hours a year, gas plants might only run for 1,500 hours during "dark doldrums."
- High Unit Cost: When a plant runs less, the fixed costs (staff, maintenance, debt) must be spread over fewer Megawatt-hours, making every unit of gas electricity significantly more expensive than the "near-zero" renewable competition.
Carbon Pricing (The Invisible Tax)
The EU Emissions Trading System (ETS) makes gas artificially expensive to ensure it loses to green tech.
- In 2026, carbon prices around €75–€90 per ton add a significant premium to every MWh of gas power.
- Unlike thermal storage (sand/salt), which has zero carbon cost, gas generators are paying a "penalty" that increases every year as the EU tightens the cap.
Infrastructure Cannibalization
As noted with the 0.1% heat loss in sand batteries, storage is now doing what gas used to do: providing "firm" energy.
- Capex vs. Opex: A sand battery has high upfront costs but almost zero "fuel" cost.
- Gas: Has moderate upfront costs but volatile, high "fuel" costs. In a world of "free" excess solar and wind, paying for fuel (gas) is becoming an obsolete business model for many industrial players.
4. Geopolitical "Risk Premium"
European industry has learned the hard way that gas prices can 10x overnight due to geopolitics.
- CEO's are now prioritizing price certainty over absolute lowest cost.
- Thermal storage provides a "locked-in" energy price for 10–20 years, whereas gas is a gamble every single month.
The Bottom Line: Natural gas is currently losing its "license to operate" in the power sector because it can't compete with the marginal cost of zero offered by renewables and the low-cost retention of thermal storage.
NOTE ON POINT 3:
For 2026, we look at two stages: the current Operational (600°C) and the emerging High-Temp (850°C+) models. These figures assume the system is charged with "near-zero" priced surplus power.
1. The "Heat Credit" Multiplier
The most important factor is the combined efficiency (thermo-electric).
- Total System Efficiency: Even if electrical round-trip is low, the combined efficiency is 90%+ because "waste" heat from the turbine is redirected to industrial processes or district heating.
- Revenue Offsetting: Selling this recovered heat at market rates (often indexed to gas prices) serves as a direct subsidy for the electricity produced. At 600°C, the volume of heat is larger; at 850°C, the electricity is more valuable, but the total economic return stays high.
https://polarnightenergy.com/news/sand-batterys-efficiency-explained/#:~:text=Sand%20is%20naturally%20self-insulating,solution%20for%20renewable%20energy%20storage.
2. Higher Temperature = Lower LCOE
By moving to 850°C - 1,000°C, the LCOE drops for two technical reasons:
- Energy Density: High-temp sand holds more energy per cubic meter, reducing the CAPEX of the storage silos by up to 30%.
- Turbine Efficiency: Higher temperatures allow the use of more efficient combined-cycle or air-Brayton turbines, which can push electrical efficiency over 50%.
3. The Obsolescence of Gas
New-build Natural Gas (CCGT) LCOE has risen to roughly $102/MWh in 2026 due to fuel and carbon costs.
Sand Battery Advantage: Once the high-temp 850°C systems are operational at scale, their Net Adjusted LCOE (after heat credits) is expected to consistently sit below $100/MWh, effectively undercutting gas-fired peakers even without considering the "security of supply" value.
Key Comparison:
- Gas: High Variable Cost (Fuel + Carbon) + Moderate CAPEX.
- Sand: Zero Variable Cost (Surplus Power) + Higher CAPEX (offset by 20-30 year lifespan).
When Germany (or any country) buys natural gas, coal, or oil, it is a literal wealth transfer to another nation. When Germany uses its own excess wind and solar to heat sand, the entire economic value stays within its borders. But even if you would be disregarding this aspect (which should not) IT’S CHEAPER!!!
The End of Capital Outflow
The absolute "killing blow" to the fossil fuel economy: The End of Capital Outflow.
When Germany (or any country) buys natural gas, coal, or oil, it is a literal wealth transfer to another nation. When Germany uses its own excess wind and solar to heat sand, the entire economic value stays within its borders.
The Macro-Economic "Triple Win" of Sand Storage
- Zero Trade Deficit (Energy Sovereignty):
- Currently, Germany spends tens of billions annually on energy imports.
- With sand storage, the "fuel" is homegrown wind and sun. Every Euro spent on energy stays in the local economy, funding the salaries of German technicians and the dividends of local energy cooperatives.
- It’s Already Cheaper (The Marginal Cost of Zero):
- Tt's not just "comparable"—it's winning. Because sand batteries charge when wind power is in such excess that prices are near-zero or negative, the fuel cost is literally $0 (or better).
- No gas field in the world can compete with a fuel cost of zero.
- The "Efficiency" of the Trade Balance:
- Natural Gas: You pay for the fuel
- you burn it
- the money is gone forever.
- Sand Storage: You invest in the silo (CAPEX)
- you use "free" local wind
- the silo lasts 30+ years. The investment becomes a domestic asset rather than a foreign liability.
The Current Financial Reality in Germany (2026)
In 2026, the "merit order effect" is hitting gas hard. Because sand storage and batteries are soaking up those 575+ hours of negative-priced electricity:
- They are effectively "stealing" the high-price hours away from gas plants.
- The "Energy Trade Deficit" is shrinking month-over-month. For every TWh of storage added, Germany effectively "fires" a foreign gas supplier.
The "Attrition Spiral" for Fossil Imports
The more sand batteries and storage Germany builds, the less it needs the gas pipelines. This leads to:
- Stranded Assets: Foreign gas infrastructure becomes underutilized and more expensive to maintain.
- The Positive Loop: Savings from not buying gas are reinvested into building more wind and more sand storage, accelerating the transition even faster.