Library filed under Taxes & Subsidies from Germany
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.
Wind power is the most important building block for the energy transition, but the phasing out of subsidies threatens countless wind turbines. In three years, a large part of the network could be taken out of service.
Move over, Ponzi; forget Bernie Madoff; ignore Enron; and dismiss collateralised debt obligations associated with subprime mortgages. Without a doubt, the biggest scam perpetrated against taxpayers and consumers is renewable energy. And if you think this scam is just an Australian phenomenon, think again. With very few exceptions, governments all over the world have fallen into the trap of paying renewable energy scammers on the basis that it is necessary, at least politically, to be seen to be doing something about climate change.
Producers blame the decline on a loophole in a new law which seeks to minimize the amount of subsidy for new wind projects. New projects are approved in an auction with the lowest bidder getting the nod – at least theoretically. But lawmakers carved out special rules for the so-called “citizens’ energy companies” – cooperative-like entities that allow local communities to own new facilities.
Siemens has warned its plans to eventually export wind turbine blades from the UK will have to be put on hold because of last week’s Brexit vote.
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.
A surcharge levied on German consumers to support renewable power will rise 3 percent next year, despite government efforts to scale back support for green power, a statement from the country's network operators (TSOs) showed on Thursday. ...A household using 3,500 kWh per year would have to pay 222.39 euros towards the EEG alone in 2016, 3 percent more than this year, retail portal Toptarif said.
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.
The plan to impose penalties on the oldest and most polluting power plants has been dropped ...The move illustrates the challenge Berlin faces as it attempts to meet its ambitious targets to combat climate change while safeguarding jobs. Despite a shift towards renewable energy, Germany still generates 44 per cent of its electricity from coal.
Twenty power companies including Germany’s biggest utilities, EON SE and RWE AG, now get fees for pledging to add or cut electricity within seconds to keep the power system stable, double the number in September, according to data from the nation’s four grid operators. Utilities that sign up to the 800 million-euro ($1.1 billion) balancing market can be paid as much as 400 times wholesale electricity prices, the data show.
Generous subsidies for renewables are unsustainable and have contributed to electricity prices for residential consumers more than doubling in Germany, placing a strain on consumers and the economy there.
Germany’s Bundestag has voted in favor of a wide-ranging revision of the nation's Renewable Energy Sources Act (EEG) to curbing subsidies and, the lawmakers hope, slow energy price increase.
The legislation, which introduces limits on how much onshore wind and biomass capacity qualifies for the full subsidies and lowers existing targets for solar and offshore wind, pulls energy policy “out of the quicksand,” Economy Minister Sigmar Gabriel told reporters.
Green groups in Germany warned on Wednesday that plans to scale back subsidies for renewable power would slow down the country's so-called 'energy revolution', saying last minute concessions to help wind farm companies were not enough.
Electricity prices in Germany are already among the highest in the world. The price of industrial electricity has risen about 37 percent since 2005, according to the Federation of German Industries. The price in the United States has fallen by 4 percent over about the same time. The rise in energy prices has already cost Germany $52 billion in net exports and could prove even more damaging if steps are not taken to keep prices in check.
In their annual report, Harhoff and his colleagues have called for the abolition of the EEG altogether. They concluded that the promotion of renewable energy makes electricity more expensive, and doesn't even lead to enhanced climate protection or more innovation. ...The EEG hinders innovation because the risk of investing in new technologies is not rewarded by the market.
Germany should scrap its clean-energy subsidies because the system has driven up electricity costs for consumers and hasn’t spurred innovation or reduced greenhouse gases, a group of government advisers said. The uncapped aid provided by the system known as EEG "isn’t a cost-efficient instrument for climate protection nor does it have a measurable impact on innovation,” the commission said in the report. “That’s why there is no basis for the continuation of the EEG.”
Currently, public support for Energiewende is still high but the rising cost has become a growing concern, and last month the new energy minister, Sigmar Gabriel, vowed to cut subsidies for wind, solar and other renewables ...Unless the new government manages to reconcile national priorities with the dynamics of its federal system, the mood could quickly turn against Germany's green revolution.
While surveys have shown that a majority of the German public does support renewable energy, there is mounting frustration with the way the government has gone about realising the Energiewende. The cost of renewable subsidies is high, ranging from €22 to 24 billion, according to Gabriel.
Merkel’s Cabinet backed proposals to charge operators of new clean-energy plants 70 percent of the so-called EEG-Umlage, a fee paid by power consumers that they’re currently exempt from, according to an economy ministry document. That would translate into 4.4 euro cents (6 cents) a kilowatt-hour.