News / Economy

Green Energy Expansion in Germany Comes at a Hefty Price

FILE - Wind turbines produce green energy in Nauen near Berlin, Germany.
FILE - Wind turbines produce green energy in Nauen near Berlin, Germany.
Ana Hontz-Ward
Germany is one of the top producers of renewable energy in the world. Since the year 2000 the country’s production of clean electricity jumped from a modest 6 percent to 25 percent last year in an effort to shift the German economy from nuclear power and fossil fuels towards wind and solar energy. Despite the progress, German consumers pay among the highest electricity prices in the European Union.  

Lissy Ishang started turning off appliances to save energy when she moved away from home a decade ago. Back then, Lissy’s family was paying half the price Germans pay today for electricity and this year German consumers are expected to pay even more.
 
Today an average family of four in Germany spends about $107 a month for electricity. This year, their monthly bill will be $129, almost three times more than a family in the United States.
 
“I always make sure that things are turned off when I leave home. I pull plugs and shut down appliances. I am trying to be careful how much we use because electricity is really, really expensive,” Ishang said.

The price hike is due to an increase in the Renewable Energy Surcharge. The surcharge is one of many government fees, taxes and subsidies that are passed on to average consumers and fund Germany’s renewable energy sector.
 
Niels Schnoor is a policy officer with the Federation of German Consumer Organizations in Berlin. He said Germany’s aggressive expansion into green energy, expensive off shore wind farms and generous subsidies will continue to drive up energy prices.
 
“Partly, the high energy prices are due to mistakes made by the government. If we had focused from the very beginning on the cheap technologies maybe the energy prices would not be as high as they are at the moment,” said Schnoor.
 
A recent government study found that eight percent of Germany’s electricity comes from wind farms, mostly in Northern Germany and the North Sea where winds are strong. Over four percent comes from solar energy, especially from Southern Germany and Bavaria where many homes and public buildings are covered with solar panels. The rest of the renewable energy is generated by hydropower, biofuels and biomass plants.

Paul Hockenos is an energy expert and journalist based in Berlin. He said building a green energy infrastructure like wind and solar parks, is expensive but once in place, Germans can expect not just lower prices but also greater energy independence.
 
"Don’t forget, what Germany is doing right now. It’s changing its power supply. The last time when an energy supply was changed was the industrial revolution; this is something that has never been done before. And Germany is not any country when it comes to heavy industry and exports power. Yes, there are price increases but Germany is still competitive on the international market," he explained. "Last year it exported more goods than it did in its history, it also exports electricity.”
 
In the aftermath of the Japanese tsunami and Fukushima disaster in 2011, Chancellor Angela Merkel renewed Germany’s pledge to abandon nuclear power and shut down eight of its 17 nuclear reactors. Germany plans to completely phase out its nuclear energy production in the next decade.

The government’s goal is that by 2050, 80 percent of electricity will come from renewable sources. Niels Schnoor said that will be possible only if Germany abandons its costly approach for a more cost effective green energy industry.
 
“We need a new start, we have to focus on the very cost effective technologies which in my opinion are wind power and solar power. We don’t need other technologies, other renewable in order to achieve the goals of the energy transition in Germany,” Schnoor stated.
 
Some would say Germany’s transformation from a fossil fuel to a green economy is a success. But consumers and industries have found the transition to an alternative source of energy has come at a hefty price. Peter Altmaier, the German minister of the environment, says the total cost of the energy transition in Germany will eventually amount to $1.3 trillion.

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Comments
     
by: Takahshi Minamin from: AKB, Tokyo
February 28, 2014 9:00 PM
New technology will expand when that is cheap and reliable, but these renewable energy such as wind turbines and solar power are hight cost due to low energy efficiency and they depend on weather condition.

by: Ray Del Colle
February 26, 2014 10:22 AM
"The cost of clean energy has dropped dramatically in recent years — even faster than experts expected.

by: Bob Wallace
February 25, 2014 8:03 PM
Germans pay about the same per kWh as people in New York and Connecticut for electricity and distribution. Less than people in Hawaii.

Added on to German's electricity bill is a stack of tax. Taxes that go to the general fund and to cover renewable subsidies.

In the US we pay those taxes via income tax.



Let's look at how costs break out for retail customers in Germany...

In 2013 the average household electricity rate is about 29 € cents / kWh according to the BDEW (Energy industry association).

The composition:

8.0 cent - Power Generation & Sales
6.5 cent - Grid Service Surcharge

5.3 cent - Renewable Energy Surcharge
0.7 cent - Other Surcharges (CHP-Promotion, Offshore liability,...)

In addition there are some taxes & fees that go straight into the governments budget:

2.1 cent - EcoTax (federal government)
1.8 cent - Concession fees (local governments)
4.6 cent - Value added tax (19% on all of the above) - (federal, state & local governments)

So 8 + 6.5 or 14.5 euro cents go to electricity purchase and delivery. About 19 US cents. That's higher than the US 12.5 cent average, but less than a penny higher than New York and Connecticut.

by: Brunswig from: Harvard
February 25, 2014 12:31 PM
it is always amazing to see how idiotic Leftist propaganda infect so called "enlightened" nations... I am still waiting to hear the Left proclaim the benefits of Eugenics and the extermination of undesirables... you think i am kidding..?? who will be the "undesirables" this time, I wonder...

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