EWEA Blog - German turbine blade brings home energy price truths

Debate in the German media and political circles is raging on the rising cost of electricity due to the increasing cost of the Renewable Energy Source Act – or Erneubare Energien-Gesetz (EEG).

The EEG was designed to fund Germany’s transition to renewable energy, accelerated following the Fukushima nuclear disaster and consequent shut down of nuclear power planned for 2022.

“With this action we want to clarify the facts for the consumer…on top of that we want to point out that the positive effects of renewable energies are completely absent from the public debate,” BWE President Hermann Albers said.

Under the terms of the EEG, electricity produced by wind, solar and biomass plants is currently being fed into the grid at a fixed rate which is above the current market price for electricity, and the consumer pays the difference between the market price and the fixed price.

Next year the cost of energy is set to rise but, say BWE, this is only partly due to the increase of renewable energy paid through the EEG. One-quarter of the cost of the EEG can be attributed to the fact that heavy industry doesn’t pay its full contribution into the EEG – they only pay the full contribution for the first million kilowatt hours of electricity they use, after that they pay just 10%.

More importantly, the price rises pale in comparison to the price hikes in petrol and oil for heating. In 2000 the average German household paid €109 a month for petrol, €95 a month for oil for heating and €63 per month for electricity (which includes the EEG contribution). In 2012, according to a German government study, these rise to €116 a month for petrol, €105 a month for oil and €65 for electricity. Just €10 of that €65 is the cost of the EEG contribution.

The point here is that, yes, the transition to renewable energy will push up the cost of electricity very slightly in the short run – and that is what is making headlines in Germany. But little is being said about the huge increases in petrol and oil costs. Besides, renewables will in the long run bring electricity prices down.

“We need renewable energies so energy prices are affordable in the long run,” Aribert Peters, CEO of the Association of Energy Consumers.

But this is not the only point BWE want to make by installing the Vestas turbine blade on the steps of political power. They want the debate to shift towards the bigger picture. In 2011, renewables saved 130 million tonnes of carbon emissions, avoiding €10 billion of environmental damage, BWE said. Renewables have also reduced the fossil fuel import bill by €7.1 billion. Moreover, today 100,000 people work in wind in Germany – a level set to rise to 160,000 by 2020.

Furthermore, the electricity price rises attributed to renewables are a drop in the ocean compared to the huge sums of money citizens have paid over recent decades for fossil fuels and nuclear – a fact that many media seem to gloss over or fail to question. When it comes to comparing subsidies paid to renewables and those paid to coal, nuclear and gas, BWE point to a study by Ökologisch-Soziale Marktwirtschaft, an environmental organisation, which shows that coal, nuclear and gas received a total of €611 billion between 1970 and 2012 in subsidies in Germany alone.

Turbine blade in front of the Reichstag:

In 2010 the EU’s energy import bill totalled a massive €355.15 billion – slightly more than the annual wealth of Poland in the same year. Read more about the costs of fuel imports here. Let’s hope that German media and politicians start to reflect on the billions we’ve paid for fossil fuels and begin to put the minor renewable energy-related price rises into perspective.

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