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Has Germany Become a Cheap Electricity Supplier?

By Edited Feb 13, 2014 0 0

It’s well known throughout the world that Germany leads the way when it comes to solar energy. The country’s green energy initiatives continually make headlines. The nation is now being dubbed a cheap electricity supplier. Recently, Reuters reported that “Germany's neighbours enjoy cheap imported power subsidised by Berlin's green energy policy and paid for by German households, analysts say” (reuters.com/article/2013/04/15/germany-power-exports-idUSL5N0D22L720130415).

Germany’s Green Scene
According to various reports, even in a northern clime like Germany solar and other renewable energies are doing well. They are doing so well that the country appears to have extra energy to spare. The Reuter’s report states “Renewable subsidies have caused German solar power glut.” The government’s initiatives and the country’s willingness to embrace alternative energy platforms are proving to be a model for the world to emulate—almost.

The Problem
According to reports, Germany role as its neighbor’s cheap energy supplier is not likely to make its citizens particularly happy. “Generous subsidies have boosted renewable electricity generation, and created a German green power glut. But Germans themselves do not see lower prices, which are restricted to the wholesale market - in fact the opposite. Instead it is their neighbours whose bills benefit thanks to cheap imports from Germany.” Reuters goes on to stipulate international energy data from the past year. According to the data, German households pay $114 more megawatt hour than The Netherlands.

The actual data looks like: “International Energy Agency data for 2012 put household electricity in Germany at $352 a megawatt hour, Dutch electricity at $238, Switzerland at $222 and France at $187.” This discrepancy is alarming for the German people who are paying such a high rate for energy. Germany’s neighbors benefit from the wholesale prices while the bills for the German people remain considerable higher.

German Energy Exports Climb
It’s no surprise that Germany’s bargain price for electricity has its neighbors clamoring, but who knows for how long. According to Deutsche Welle, “German electricity exports have climbed to a four-year record in 2012” (dw.de/german-power-exports-soar-amid-green-energy-revolution/a-16713504). Without changes to German law, the ironic situation for Germany’s citizens will remain in place. They’ll be footing the cost of renewable energy while their neighbors celebrate cheap electricity.

According to the same report, “the Netherlands was the biggest importer of German electricity last year, ordering 22.6 TWh. It was followed by Austria and Switzerland which imported 15.9 TWh and 12.7 TWh respectively.” Germany’s exports, as the report indicates, have been steadily increasing.

Excess Energy Still Good News
Whole electricity exports aside, the excess energy has eased concerns about the diminishing of nuclear power in Germany. After the Japan’s Fukushima disaster, nuclear energy took a decided hit as many nations began to re-examine safety platforms and shut down older reactors. The Germany-based Local reported that the country’s high rate of export dashed “concerns that the country's nuclear phase-out would lead to shortages” (thelocal.de/money/20130402-48881.html#.UYcHrbVQGCk).

The report when on to say that “Germany was considered brave - and foolhardy by some - when it decided to phase out nuclear power in the wake of the nuclear disaster at Fukushima.” In addition, “there are no indications that the country will suffer a shortage. To date, Germany has closed eight of its 17 nuclear power plants and is set to shut all the rest by 2022.” The excess renewable energy even in light of decrease reliance on nuclear energy is a dramatic turn of events that will likely get more coverage in the ensuing months.

Green Energy Turns a Profit
Some of the profit generated by the excess of green energy is due, of course, to German households paying those increased rates for electricity, but the whole situation suggests that even when Germany’s citizens are able to share in the savings (and it will almost have to come to that or there will be some major upheaval), renewable energy will be profitable—and not just for the environment. As the Wall Street Journal reported, “The rapid expansion of solar- and wind-power installations are seen as the main reason for continued German electricity exports” (online.wsj.com/article/SB10001424127887323611604578398420710992106.html).

As ThinkProgress asserted, “Germans have redoubled their efforts to phase out of nuclear energy and fossil fuels in favor of renewable energy” (thinkprogress.org/climate/2013/03/27/1781671/learning-from-the-german-transition-to-renewable-energy/). Of course, Germany’s ministers have acknowledged the problem for its citizens. As the article included, “rising electricity bills are the biggest barrier to the Energiewende [renewable energy] because they undermine public approval.”

Why Might Germany Want Its Citizens to Pay those Higher Prices?
There are actually sound reasons why those elevated electric bills are positive for the nation in the long run. As the ThinkProgress piece asserted, “Germany struggles with the same set of issues as we do in the US: from the costs of expanding the electricity grid, to fighting fossil fuel interest groups, and keeping jobs in the face of international competition.” The higher rates simply balance out these other concerns—which are large concerns indeed. Obviously, “The issue of how to fairly distribute the investment costs of a renewable energy future will be interesting to follow as Germany heads for national elections.”

Would Storage of Excess Energy Help?
Many have suggested that Germany needs to tackle the issue of storage for its excess energy. PV Magazine asserted that “storage solutions are called for to store such excess power” (pv-magazine.com/news/details/beitrag/germany--power-exporter-even-with-fewer-nuclear-plants_100010756/#axzz2STTX8Xwr). It continued by stating that “German politicians and energy experts have been holding discussions over a possible energy storage subsidy for months now. The framework for the program has already been agreed upon by Germany's Federal Environment Ministry and the KfW state bank, but the execution is still on hold.” As the politicians wrangle over energy storage, the nation is, nevertheless, moving closer to a plan to deal with the extra energy.

Eyes on Germany
Clearly Germany will continue to be viewed closely on the energy front. For one thing, the story of the excess energy is still unfolding and it remains to be seen whether Germany will lower utility bills for its people or leave them as is. Clearly, Germany has shown the world that renewable energy is a viable solution and as the nation works through its current issues, the world may have more to learn from its example yet.



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