Library filed under Impact on Economy from Europe
Unreliable solar and wind power in Germany cause more and higher electricity costs for the power grid.
The wholesale costs of power make up only about a fifth of the average household electricity bill in Germany. The rest is a stew of taxes, fees to finance renewable-energy investments and charges for use of the grid. That means their bills are lower than they otherwise would be, because power prices are sometimes negative, but utilities are not depositing money in customers’ bank accounts.
In the year that ended, electricity was more expensive than ever before - and at the beginning of the year prices are still rising, according to the "Handelsblatt" newspaper. The newspaper relied on a recent analysis of the consumer porta, Verivox.
The document claims that ‘it has been widely assumed that the underlying costs of offshore wind are falling and that the CfD prices indicate a sudden paradigm for the technology’. Yet, the report points to statistical analysis of the data, covering 86 wind farms, which suggests that the capital cost of offshore wind (£/MWh installed) is not in actual fact falling, but actually rising as a consequence of companies moving into deeper and deeper waters.
The levy German power consumers pay on their electricity bills to finance the build-up of renewables (EEG surcharge) next year will jump by 8.3% to €0.0688 ($0.0758) per kilowatt hour of electricity consumed, re-igniting a heated debate on the cost of the country’s energy transition.
Highland-based industry watcher Stuart Young said: "I was disgusted how people were crowing about how much electricity had been generated by wind when customers are going to be hit so hard in their pockets. "The number of megawatt hours wasted - constrained off - was 46,150.
Highland anti-windfarm campaigner Lyndsey Ward said: “These are mind-boggling sums of money that enriches the already wealthy wind multinationals to not generate electricity – and it comes out of our pockets. “It’s time to end this madness.”
Because the power grid is overloaded, more wind wheels must always be limited. This costs the network operators hundreds of millions of euros.
For a year, Germans could hope for decreasing, or at least stable electricity prices. But now they know their expectations will not met. Quite the opposite: A recent analysis of price comparisons by TopTarif reveals that consumers are currently paying as much for their electricity than ever before.
Thanks to government policies deliberately distorting the market, we have over-invested in wind and solar. It has blighted investment in reliable capacity that can keep the lights on. This is the crux of Britain’s energy crunch. Clearly it was a colossal mistake to have embarked on renewables with storage unsolved.
The Eurelectric analysis showed that without all of those excess costs, Danes would pay electricity costs under the European average. Lars Aagaard, the CEO of the Danish Energy Association (Dansk Energi) said the high level of taxation is strangling Denmark’s green conversion.
As more wind farms sprout up in Scotland an increasing amount of subsidy is being paid. The £51.5million subsidy paid to wind farms is more than double the £22.7million paid over the same three months last year.
“I think the criticism is over the top,” Lars Christian Lilleholt, Denmark’s energy minister, told the Politiken newspaper last month. He said the country still planned to invest 800 million krone, or $114 million, in green energy research in the coming year. “There is less money, but it is still a lot. And I sit in a government that must find a way for the Danish economy to make ends meet.”
The green energy transition is becoming ever more expensive for consumers. By the end of 2016 an average household will incur additional charges of approximately 540 euros. This is evident from calculations by the Institute of the German Economy in Cologne (IW Köln) seen by Welt am Sonntag.
Start with a suite of renewable-energy policies that keep ratcheting up electricity costs. The so-called renewables obligation, which requires utilities to buy a steadily increasing share of their power from trendy green sources such as solar and wind, is driving up wholesale power prices. So is the feed-in tariff, which forces utilities to pay a minimum rate for renewable electricity that’s higher than the cost of fossil-fuel-fired generation.
As many as 73% of manufacturers want to see legislative reform of the UK's current environmental and climate change policies, according to a new survey by the manufacturers organisation EEF. Respondents claimed that existing regulations are harming their international competitiveness.
To put an end to the often unexpected power flows from Germany — so-called loop flows — the countries are taking the matter into their own hands. Concerned about the stability of their own grids, additional costs and the ability to export their own power, the Czechs, for example, are installing devices to block the power from 2016 onwards.
Sardinian prosecutor Mauro Mura warned last year of mafia infiltration in the sector, flagging up instances of renewable energy plants which had profited hugely from subsidies open exclusively to farmers, while "not producing any agricultural goods at all".
“We can’t have a situation where industry has a blank check, and that check is paid for by people’s bills”
Under the scheme, everyone – from a household who decided to put a solar panel on the roof to the developer of an offshore wind farm – was guaranteed a premium on top of the market price for electricity, to help encourage the development of renewables. ...due to a decline in the wholesale price of oil and gas, as well as higher than expected installation of home solar panels, this budget of £7.6bn per year has already been busted by more than 20 per cent.