Ever since Germany decided to phase out nuclear energy in the wake of Fukushima, local activists have been touting the results of the shift, known in German as the “Energiewende.” But what has the cost been to the nation’s economy. NEI’s Mark Flanagan looks at a recent EEI report that’s full of interesting details.
Household electricity prices in Germany have more than doubled, increasing from €0.14/kilowatt hour (kWh) ($0.18) in 2000 to more than €0.29/kWh ($0.38) in 2013.
This outcome has occurred with many of the nuclear plants still operating, so these costs presumably will only go higher after the plants close in 2021. (The cost for household electricity in the U.S. is about $0.13/kWh , for comparison).
The rapid introduction of renewable energy sources has caused in wholesale prices in Germany for baseload to fall dramatically from €90-95/megawatt hour (MWh) in 2008 to €37/MWh in 2013. This has created a large amount of load and margin destruction for utilities that built and financed thermal plants. Many new gas-fired power plants have been rendered uneconomical, leaving owners to shore up their balance sheets by undertaking large divestitures of some of their holdings, as well as by reducing their operational costs.
Wait – shouldn’t household prices go down if wholesale costs decline?
This is being caused by subsidies granted to renewable energy sources and a provision of Germany’s renewable energy law that mandates electric companies buy renewable energy ahead of thermal-powered energy regardless of need.
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Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
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