Innovative policies, including higher contributions from industry, home energy efficiency improvements, and consumer awareness of price differences between suppliers, are called for to help Germans lower energy prices during the switch to renewables, argues Paul Hockenos.
Writing about energy is a complicated business, especially for journalists who don’t specialize in the field – which is why one sees so many mistakes in energy-related stories. The Economist had been responsible for some of the worst stories in 2012 and 2013 – chock full of inaccuracies. This recent contribution on the Energiewende has fewer, which is good of course – but nothing to brag about.
For one, it is a fundamental misconception to describe the energiewende as a “marketing slogan” and “mainly a set of timetables for different goals.” Anyone or any country can announce goals and timetables. That’s the easy bit. The energiewende is much more than that. It entails the wide-ranging transition of Germany as such, from a society and economy based on fossil fuels and nuclear power, to a country run on renewable energy and structured as energy efficiently as possible. This is a transformation that will change – and is in the process of changing – everything: urban design, markets, lifestyles, architecture, agriculture, education, regulation, and more.
And, in fact, the figures posted as goals have had little to do with the transition so far. Germany’s open-ended feed-in tariff has driven clean-energy development, largely irrespective of goals – goals which have been set and reset to catch up to the unexpected success of onshore wind and solar photovoltaics. It’s not like the quota or tendering systems in other countries, where goals and targets are set and renewable power is incentivized just to that point – and then capped. In Germany, the goals have chased renewable energy expansion, not the other way around.
Also, I take issue with the price argument: that consumers’ electricity bills will only go up and up as a result of the energiewende – and there’s nothing to be done about it. First of all, the average household (using 3000 kilowatt hours a year) pays about €190 a year more to compensate incentives, and not €260 as The Economist claims. Secondly, their bills could be lower if all Germans were savvy enough to switch suppliers. About half haven’t and are thus stuck with high incumbent prices. These companies obviously aren’t passing on lower wholesale prices – a direct result of renewable energies with low marginal costs – to their customers. My supplier, Lichtblick, is an exception, and has announced it is sinking its power prices in 2014. It says it doesn’t expect to raise them in 2015 either.
So, combine a little comparative shopping with basic household energy efficiency measures and the average consumer could be helping him- or herself. (My power bill decreased in 2013, unlike my gas bill. Ouch!) Should more German companies also be forced to kick in – as should have happened from the beginning – this would relieve the consumer yet further. And it’s long overdue that Germany consider paying for the energiewende in ways other than the feed-in tariff alone (like the myriad ways nuclear and fossil fuels were subsidized over the decades).
After four years of paralysis, Germany could well use a little innovative policymaking for the energiewende. Federal economics and energy minister Sigmar Gabriel and his team are just getting started. They’ve got lots of options.
Paul Hockenos is a Berlin-based journalist and author of the Going Renewable blog, where this post was first published.
That the price for electricty in Germany raised is not a direct effect of the Energiewende but a politically desired indirect effect.
The exact numbers are hard to get, but here is a simple estimate:
gross power generation 2008: 640.7 TWh
average price at EPEX 2008: 66.78 €/MWh
gross power generation 2013: 633.6 TWh
average price at EPEX 2013: 37.86 €/MWh
640,700,000 * 66.78 – 633,600,000 * 37.86 = 18,797,850,000 €
So in 2008 were 18.8 bn € paid more then in 2013. Additionally to that money paid at EPEX Germany paid 20.3 bn € EEG-Umlage, resulting in additional costs of 1.5 bn € or 0.35%.
The only problem is, that the energy intensiv industrie got lots of benefits, which in the end result in higher costs for normal consumers – but this is the mentioned politically desired indirect effect …
[…] 2014/02/26: GET: Transition Beyond Goals Innovative policies, including higher contributions from industry, home energy efficiency improvements, and consumer awareness of price differences between suppliers, are called for to help Germans lower energy prices during the switch to renewables, argues Paul Hockenos. […]