As a part of our annual update, we have created a few new charts and updated some old ones. The Energiewende story has also been updated to reflect the latest data and policy developments from 2014. Craig Morris focuses on a single chart today. Since October, the underlying analysis could have been updated, but – tellingly – no one has seen fit to do so.
Our website consists mainly of two parts. Look to the left, and you will see one button for “the Energiewende story” and another for “the Energiewende blog.” The blog is self-explanatory; it’s what you are reading now. The “story” section is more static; it represents history and is updated once a year. You can either read it online or download all of it as an e-book under “downloads”.
But today, I’d like to focus on the “infographics”. These are charts used throughout the “Energiewende story.” Click on that button, and you can view all of them – and download them in the format of your choice.
Let’s focus today on one we were not able to update – and that inability is a story on its own. The chart below shows the breakdown of the renewable energy surcharge. In particular, it highlights that expenditures for renewable energy (the feed-in tariff, green section) were not the main cost driver in the surcharge. Rather, the increase was the result of policy design (all of the bluish areas).
And here’s the best part: this information was not updated at all for 2015. The surcharge for this year was announced on 15 October 2014, so it has been possible since then to calculate these components. No organization has yet seen fit to do so. I asked someone from an association that produced a breakdown of the surcharge in previous years why there had been no update, and he said, “everyone has called a truce. The cost debate is over.”
The entire cost debate was in fact artificially created. By 2012, then-Environmental Minister Peter Altmaier’s call to “put the brakes on power prices” had taken center stage. As the elections of 2013 approached, cost seemed to be the only issue that decision-makers were talking about when it came to the Energiewende. Yet, the Energiewende was not a major issue for the German public, which – at the time – was far more interested in the discussion about minimum wage and the financial crisis.
The international press mistook this top-level focus on prices to be a general concern among the public. In reality, the public mainly remained interested in protecting its right to make its own energy. The confusion can be considered a success for the INSM (Initiative Neue Soziale Marktwirtschaft), a lobby group for employers in the German metals and electronics sector, which orchestrated a campaign to highlight the cost of the Energiewende in the run-up to the 2013 elections.
The cost of the Energiewende remains basically unchanged, but the INSM has left behind its bleeding heart to talk about other issues, such as defending TTIP. Note that other organizations traditionally involved in protecting consumers and the poor have always been supportive of the Energiewende.
In 2014, talk about energy prices died down as oil prices fell and power prices stabilized. The renewable energy surcharge fell slightly in 2015 (announced in 2014) for the first time, as did the average monthly power bill. It seems that our chart above may soon become an historic document – one showing not only the components of the surcharge, but also inadvertently documenting fleeting interest in the issue.
Craig Morris (@PPchef) is the lead author of German Energy Transition. He directs Petite Planète and writes every workday for Renewables International.
What would be the specific cost (eur/kWh) if you took the total support cost and divided it with all electrical energy produced under this support program? That is a telling figure because it shows what the cost would be with only this kind of power (not really because as the amount of VRE rises other cost will also rise due to storage cost etc.). The 2.56 eur-ct represents only a fraction of total.
You also need to consider that in the future you can’t expect prices to drop because some of drop in wholesale price is on the behalf of decreased revenues for owners of conventional plants. In the future, when these plants are closed, the price will go up.
My view is that it is a mistake to pretend that commitment to renewable energy does not bring additional costs in one form or another.
I think the way to deal with this is to (a) point out that renewable energy costs tend to be related to capital investment (as the “fuel” is free) – so it is a question of whether you are prepared to put in the capital (choosing over other capital projects like freeways, high speed rail, airport expansion, and so on) and (b) point out the various benefits of renewable energy (clean air, domestic employment, energy independence and cost certainty).
“What would be the specific cost (eur/kWh) if you took the total support cost and divided it with all electrical energy produced under this support program?”
Based on 2014 figures: around 130 TWh of electricity produced by biomass, wind and solar, and 20 billion paid in FITs, you get cost of around 150 euros per MWh. Or 15 cents/kWh.
New record low on the German power exchange, no future peak load power over €40.-/MWh anymore.
German power is as cheap as never before!