# Electric Rates in Germany

## Recommended Posts

No electricity is pretty much equivalent to no computing capacity unless you are using slide rule or abacus.

Coal heap approach is being used in Germany with high rates as a consequence, explain that.

Not so. Moore's Law is dependent upon putting more circuit capacity in the same area.

The ANALOGY is spot on, sir, in that both devices are electrically operated on demand, ergo, a reliable source of current is vital.

Thanks for the link to the Canadian household. Looking at their records I see quite a few days in the early part of the year where very little power was produced.

I also notice that it is very rare for output to match advertised nameplate capacity and wide variations according to the caprices of the weather.

This would be fine if the Canadians and the Germans adjusted their consumption of power to match such caprices, but guess what?

THEY DON'T.

Your Canuck buddies gleefully admit that the grid acts kind of like a giant battery. A FREE BATTERY, in the sense that they didn't have to pay for it, and they can sell lots of sunshine to the folks who built and maintain the freaking thing at retail rates. This depresses the profitability of that wonderful battery until guess what?

It isn't there anymore.

Does moving the goalposts this much tire you out? Your claim was that solar produced almost no power on cloudy days, and that claim is false.

##### Share on other sites

If somebody tried to sell me a computer or even a toaster that only worked in fair weather I wouldn't buy it and would tell them to get lost.

How much would you pay for a toaster whose design featured a .001 chance of melting in your kitchen, killing anyone in the house when it happened, and making your house and all your possessions unapproachable for 2000 years?

Edited by overtone
##### Share on other sites

Since nuclear power is not really discussed in Germany the better comparison would be a toaster that emits harmful fumes but is the favorite toaster model of the mining and steel unions.

##### Share on other sites

Does moving the goalposts this much tire you out? Your claim was that solar produced almost no power on cloudy days, and that claim is false.

Very well, make that "snowy days" since that is probably the cause of the nearly nil production in the early months of the year. The output varies widely and when it vanishes, it is SOMEBODY ELSE'S PROBLEM.

So your Canadian customers benefit at everyone else's expense, and the government pays them to do so. How long is that going to go on?

How much would you pay for a toaster whose design featured a .001 chance of melting in your kitchen, killing anyone in the house when it happened, and making your house and all your possessions unapproachable for 2000 years?

Your chances of being in an auto accident are better than that. Do you drive? Furthermore, the RBMK "toaster" associated with Chernobyl(currently a wildlife refuge and tourist attraction of sorts) is no longer being manufactured, and the tsunami which damaged the Fukushima "toaster" some years back is not a threat to me or our good friends in Germany.

Since nuclear power is not really discussed in Germany the better comparison would be a toaster that emits harmful fumes but is the favorite toaster model of the mining and steel unions.

Correct, sir. Steel can be produced without coal only with difficulty. Oddly, Germany imports a large volume of coal in addition to the domestic lignite production. About a third of imported coal goes to steel production, but imports are declining this year due to falling demand.
##### Share on other sites

Very well, make that "snowy days" since that is probably the cause of the nearly nil production in the early months of the year. The output varies widely and when it vanishes, it is SOMEBODY ELSE'S PROBLEM.

So your Canadian customers benefit at everyone else's expense, and the government pays them to do so. How long is that going to go on?

Somebody else's problem? Buying electricity from the utility already has a solution.

How is this benefitting at everyone else's expense? How is this the government paying them to do so?

##### Share on other sites

Somebody else's problem? Buying electricity from the utility already has a solution.

How is this benefitting at everyone else's expense? How is this the government paying them to do so?

The system is subsidized by either the provincial or national government, to answer your last question first sir. So that expense is borne by their fellow taxpayers.

By selling surplus electricity to the distribution grid at retail rates, they degrade the performance of that grid at the expense of their fellow ratepayers.

If enough people follow suit, reliable power sources and the means to distribute any power at all become unprofitable, at no cost to those who have undermined the system, until a blizzard hits one day and nothing happens when they flip the switch.

##### Share on other sites

The system is subsidized by either the provincial or national government, to answer your last question first sir. So that expense is borne by their fellow taxpayers.

Just like many other government programs (oh, wait, it's all of them, actually. e.g. I subsidize your mortgage, if you have one). And presumably these people are also taxpayers.

By selling surplus electricity to the distribution grid at retail rates, they degrade the performance of that grid at the expense of their fellow ratepayers.

They do? Surely you have evidence to back this claim up.

Oh, who am I kidding? Of course you won't post any evidence to back this up. In fact it's probably the opposite, since less load on the grid means less urgency to have it be updated and upgraded.

If enough people follow suit, reliable power sources and the means to distribute any power at all become unprofitable, at no cost to those who have undermined the system, until a blizzard hits one day and nothing happens when they flip the switch.

No cost? Solar panels are free now? And utilities are helpless to change the system to ensure that they remain profitable? Tell me in greater detail how the sky is falling.

This must also mean that electric and hybrid vehicles are a bad thing™, because that will reduce demand for gasoline and oil companies will no longer be profitable. We must protect businesses at all costs! Defend those buggy makers!

##### Share on other sites

We are off topic but you asked the question and I have answered to the best of my ability, sir.

Typically, when this sort of arrangement is in place the government underwrites the cost of installation for the property owner, through tax credits or similar means. As far as I know, the utility provider receives no such incentive- typically, in fact, they are cursed with a fluctuating supply as well as the preexisting fluctuating load. This is hard on the equipment and the poor devils who are trying to match generated power to load. Typically also the electricity produced by the variable source is sold back to the utility at the same rates(retail) as the householder pays for baseload or dispatchable power. This process is pretty much the same in Texas, Ontario, or Saxony.

If I have made erroneous assumptions perhaps you would be kind enough to correct them.

The automobile analogy is not a good one, though there are certain similarities. For one thing, the infrastructure vehicles operate on is generally government owned and maintained, usually via some fuel tax, and even hybrid vehicles purchase some fuel. The roads themselves are completely unaffected by the means of power driving the vehicles which drive upon them, the rate at which they travel, etc. The principal financial and physical stress upon road networks is vehicle weight, though weather conditions can be significant, of course.

An electrical distribution grid must match supply to demand instantaneously and within rigid requirements as to supplied voltage and frequency, e.g. 60 Hertz. And yes, if the game isn't worth the candle, companies will cease to invest in such distribution networks and the price of batteries will skyrocket.

Thank you for your observations and I hope you are in good health and spirits today.

No cost? Solar panels are free now? And utilities are helpless to change the system to ensure that they remain profitable? Tell me in greater detail how the sky is falling.

This must also mean that electric and hybrid vehicles are a bad thing, because that will reduce demand for gasoline and oil companies will no longer be profitable. We must protect businesses at all costs! Defend those buggy makers!

Solar panels are of course not free, just subsidized preferentially to yuppies by various states. Utilities can in fact be expected to point out the flaws in such schemes, perhaps in court.

Returning to the topic, German utilities are spending quite a bit on lawyers, which in turn will pass on the costs to ratepayers if they lose, and taxpayers if they win. A dreary prospect others might wish to avoid.

Finally a note about automobiles. In general they have become lighter and we can expect them to become more so in pursuit of ever greater fuel economy. Probably at some point road taxes will no longer depend on fuel sales per se, but will be assessed on the number of miles driven annually. These are all good things and should not affect drivers or auto manufacturers adversely.

##### Share on other sites

Typically, when this sort of arrangement is in place the government underwrites the cost of installation for the property owner, through tax credits or similar means. As far as I know, the utility provider receives no such incentive-

The view that the major utilities and power sources in the US have received and are receiving no government help and subsidy is one of the most bizarre aspects of the "renewables" debate.

They don't even have to take care of their own waste CO2.

German utilities are spending quite a bit on lawyers, which in turn will pass on the costs to ratepayers if they lose, and taxpayers if they win. A dreary prospect others might wish to avoid.
In the US we can put the cost on stockholders and executives. ​We can also set if up to stiff the lawyers. If we choose to do so. Edited by overtone
##### Share on other sites

Typically it is the little guy who is left holding the bag on these sorts of deals. Remember the savings and loan bailout?

But I hope you are right. Thank you for your interest.

I hope your evenings are pleasant, gentlemen and we can speak again tomorrow.

##### Share on other sites

Typically it is the little guy who is left holding the bag on these sorts of deals. Remember the savings and loan bailout?
But that is not a property of the universe. It is a criminal act of a small number of people, that decent politics can handle (and has, in the past - see FDR's handling of military contracting fraud in WWII).

We look forward to your support in making sure the likes of Reagan - who stuck the little guy with the S&L losses - never gets control of the US justice system again.

##### Share on other sites

Solar panels are of course not free, just subsidized preferentially to yuppies by various states. Utilities can in fact be expected to point out the flaws in such schemes, perhaps in court.

If your concern is subsidies, why focus on solar and other renewables as opposed to the true beneficiaries of said subsidies?

Sources:

In cumulative dollar amounts, over the lifetimes of their respective subsidies, the oil, coal, gas and nuclear industries have received approximately $630 billion in U.S. government subsidies, while wind, solar, biofuels and other renewable sectors have received a total of roughly$50 billion in government investments.

The federal government has subsidized traditional energy technologies for more than 60 years before supporting renewable energy. A recent Congressional Budget Office (CBO) report notes: From 1916 to the 1970s, federal energy-related tax policy focused almost exclusively on increasing the production of domestic oil and natural gas; there were no tax incentives for promoting renewable energy or increasing energy efficiency.

<...>

Tax preferences for traditional energy outweighed those for renewable energy through 2007. [T]ax preferences for fossil fuels continued to make up the bulk of all energy-related tax incentives through 2007, typically accounting for more than two-thirds of the total cost.

According to a 2012 study from the Worldwatch Institute (WWI), global energy subsidies total between $775 billion and more than$1 trillion in 2012, while renewables clocked in at around \$66 billion in 2010.

Claims that renewables like wind and solar cost too much, are more expense and cannot compete with oil and gas, that fail to acknowledge the different magnitudes and manner by which subsidies and tax breaks are actually delivered are (as demonstrated above and elsewhere) inherently flawed and rather trivially wrong.

##### Share on other sites

Typically, when this sort of arrangement is in place the government underwrites the cost of installation for the property owner. [...] Typically also the electricity produced by the variable source is sold back to the utility at the same rates(retail) as the householder pays for baseload or dispatchable power. This process is pretty much the same in Texas, Ontario, or Saxony.

If I have made erroneous assumptions perhaps you would be kind enough to correct them.

Not sure if that matters for the point you are trying to make. But since you explicitly asked, and since Germany originally was on-topic: That is not how it works in Saxony. From having talked to an Austrian farmer I know it's also not how it works in Austria. Not sure about Texas and Ontario.

In Germany, installation of renewable generation is not subsidized (installing measures for improving energy efficiency are, which is a key aspect for renewable scenarios but usually not the topic of discussions like this). Instead, the generated electricity is paid for by a fixed amount depending on technology, time of installation, and a few other parameters. And as mentioned before, these subsidies are not paid by the taxpayers but by the electricity consumers (who of course often tend to be taxpayers, too), and directly appear as part of the electricity bill.

The rates you get for PV generation are written down in a law called "EEG" (Erneuerbare Energien Gesetz: Law on renewable energies). The rate the house-owner pays for drawing power depends on the contract with their electricity provider. The price difference can be anything, since both the subsidies written down in the EEG and the electricity prices the provider charges are subject to change: EEG subsidy decreases, electricity prices increase. Parity was around 2012. Before that it was a better bargain to feed in everything and buy for cheaper price (as the Austrian farmer did), now there is an increasing push towards using as much of your PV generation yourself as possible. Explicit numbers can be seen in figure 5 of this link: http://www.ise.fraunhofer.de/de/veroeffentlichungen/veroeffentlichungen-pdf-dateien/studien-und-konzeptpapiere/aktuelle-fakten-zur-photovoltaik-in-deutschland.pdf. Blue line is private PV generation, red line is mean electricity costs for private households (sorry for the source being in German, but I did not want to look for an English one and Fraunhofer ISE is a very reputable source).

As a side-note since Moore's law was mentioned before: Figure 4 shows a kind of Moore's law. Shown are the mean installation costs of PV panels (Euro per Watt-peak) vs. the total installed power so far (Germany, I think). It kind of follows a logarithmic relation.

##### Share on other sites

Not sure if that matters for the point you are trying to make. But since you explicitly asked, and since Germany originally was on-topic: That is not how it works in Saxony. From having talked to an Austrian farmer I know it's also not how it works in Austria. Not sure about Texas and Ontario.

In Germany, installation of renewable generation is not subsidized (installing measures for improving energy efficiency are, which is a key aspect for renewable scenarios but usually not the topic of discussions like this). Instead, the generated electricity is paid for by a fixed amount depending on technology, time of installation, and a few other parameters. And as mentioned before, these subsidies are not paid by the taxpayers but by the electricity consumers (who of course often tend to be taxpayers, too), and directly appear as part of the electricity bill.

The rates you get for PV generation are written down in a law called "EEG" (Erneuerbare Energien Gesetz: Law on renewable energies). The rate the house-owner pays for drawing power depends on the contract with their electricity provider. The price difference can be anything, since both the subsidies written down in the EEG and the electricity prices the provider charges are subject to change: EEG subsidy decreases, electricity prices increase. Parity was around 2012. Before that it was a better bargain to feed in everything and buy for cheaper price (as the Austrian farmer did), now there is an increasing push towards using as much of your PV generation yourself as possible. Explicit numbers can be seen in figure 5 of this link: http://www.ise.fraunhofer.de/de/veroeffentlichungen/veroeffentlichungen-pdf-dateien/studien-und-konzeptpapiere/aktuelle-fakten-zur-photovoltaik-in-deutschland.pdf. Blue line is private PV generation, red line is mean electricity costs for private households (sorry for the source being in German, but I did not want to look for an English one and Fraunhofer ISE is a very reputable source).

As a side-note since Moore's law was mentioned before: Figure 4 shows a kind of Moore's law. Shown are the mean installation costs of PV panels (Euro per Watt-peak) vs. the total installed power so far (Germany, I think). It kind of follows a logarithmic relation.

Thank you for a most illuminating post.

I must sign off now but be sure I will carefully consider all of your points before responding, gentlemen. It is a pleasure conversing with each of you.

##### Share on other sites

• 2 weeks later...

How much the consumer pays for electricity is not an indication of how much it costs to generate said electricity. Last year, when German consumers were paying high prices for their power, Germany had one of the lowest production costs in Europe (substantially lower than France with all of its nukes). Here is an article with a good explanation of the reasons for this. http://cleantechnica.com/2014/05/27/german-electricity-prices/

Even more importantly than price, German per capita CO2 emissions have gone down, especially when compared to the 1990's when the push for renewables began in earnest.
http://data.worldbank.org/indicator/EN.ATM.CO2E.PC?page=3

I apologize for entering this discussion late but this is a topic I spend a lot of time talking about.

##### Share on other sites

How much the consumer pays for electricity is not an indication of how much it costs to generate said electricity. Last year, when German consumers were paying high prices for their power, Germany had one of the lowest production costs in Europe (substantially lower than France with all of its nukes). Here is an article with a good explanation of the reasons for this. http://cleantechnica.com/2014/05/27/german-electricity-prices/

Even more importantly than price, German per capita CO2 emissions have gone down, especially when compared to the 1990's when the push for renewables began in earnest.

http://data.worldbank.org/indicator/EN.ATM.CO2E.PC?page=3

I apologize for entering this discussion late but this is a topic I spend a lot of time talking about.

Good heavens, please do not think for a moment that your comments are unwelcome. Please elaborate and if you have the time be kind enough to correct any errors that review of the thread may reveal to you. Many of us are based in the USA where matters are obviously quite different. It is my understanding though, that reliance on coal to see the demand for power is met when renewables fall short(as they regularly and inevitably must) must increase in the absence of nuclear power.

Not every nation can enjoy the abundance of hydropower that Norway does, unfortunately.

##### Share on other sites

...reliance on coal to see the demand for power is met when renewables fall short(as they regularly and inevitably must) must increase in the absence of nuclear power.

While this is true, it is just as true that the more renewables you have, the less need for coal or other fossil fuels. Again, as mentioned previously in this thread, storage can obviate the need for fossil fuel backup and there are many ways of storing energy besides batteries. Without going into a discussion of the relative merits of nuclear power vs other sources, I can definitively say that attributing higher prices in electricity to abandonment of nuclear power in favor of renewables is not likely to stand up to scrutiny. The price of nuclear power has consistently increased ever since its inception to become one of the most costly sources currently in widespread use whereas the prices of wind and solar have decreased. (if you need citations for that, I will be happy to provide it but thought it was fairly common knowledge)

##### Share on other sites

There is a great deal of "common knowledge" out there which is simply untrue, particularly with regard to nuclear matters. Again, welcome to the discussion but the hour here is quite late and I must bid you good night. I look forward to investigating your links and hope to supply resources of my own at a more opportune time.

##### Share on other sites

It is my understanding though, that reliance on coal to see the demand for power is met when renewables fall short(as they regularly and inevitably must) must increase in the absence of nuclear power.

You can rely on it more, but use less of it, and how much you use is the important issue.

##### Share on other sites

"There is a great deal of "common knowledge" out there which is simply untrue, particularly with regard to nuclear matters."

Note that only the VERY pro-nuclear Royal Academy of Engineering lists nuclear power as being competitive with fossil fuels. At present wind and solar about the same or slightly less than coal and natural gas and are continuing to go down in cost. How much are coal and natural gas likely to go down in cost over, say, the next 20 years?

Edited by npts2020
##### Share on other sites

This is very much dependent upon a variety of factors. Note that in Germany, even though nuclear power is not being sold, somebody must pay for the remainder of the cost of the installations and their eventual decommissioning. The matter is before the relevant courts and since the facilities cannot be put to their intended use, the cost is arbitrarily high.

Germany must also pay for arguably superfluous coal generation capacity as well as renewables.

In the case of solar photovoltaic panels, unless I am mistaken, the projected life expectancy of the equipment is closer to 25 years vs the customary 50 to 60 years of conventional sources, so doubling the cost seems reasonable. I confess I have little knowledge of the longevity of wind power equipment.

##### Share on other sites

That does not seem to be the case, if we assume that the panels are the weak point:

The National Renewable Energy Laboratory (NREL) performed a meta-analysis of studies that examined the long term degradation rates of various PV panels. They found that the 1% per year rule was somewhat pessimistic for panels made prior to the year 2000, and today’s panels, with better technology and improved manufacturing techniques, have even more stamina than their predecessors. For monocrystalline silicon, the most commonly used panel for commercial and residential PV, the degradation rate is less than 0.5% for panels made before 2000, and less than 0.4% for panels made after 2000. That means that a panel manufactured today should produce 92% of its original power after 20 years, quite a bit higher than the 80% estimated by the 1% rule.

##### Share on other sites

Actually, the 25 years may not be such a bad value, and I think they are common in professional literature - even among supporters of renewables. Rough estimates I know are 20 years for wind turbines and 30 years for PV.

What is more dubious is the implicit assumption that people calculating energy costs are not aware of typical lifetimes of power plants, and that you need to correct some of the numbers calculated by people who make their living by doing such calculations by a factor of two because you think you know better - possibly without even having read the publications the numbers originated from.

EDIT: Thinking of it: How would one even calculate levelized costs without taking into account lifetimes or lifetime-generation of the power plants?

Edited by timo
##### Share on other sites

Do professionals make such mistakes?

Let's ask Arthur Andersen and the good folks at Enron.

Basically salespeople are paid to lie, so the more heavily promoted something happens to be, the bigger a grain of salt my experience encourages me to take along with it.

All the same, thanks for the links.

##### Share on other sites

Basically salespeople are paid to lie, so the more heavily promoted something happens to be, the bigger a grain of salt my experience encourages me to take along with it.

Glad you brought this up. When it comes to nuclear power, you will need an entire salt truck for any cost estimates claimed. Since at least the mid-60's I know of no nuclear power plant built in the US at or under the cost projected when construction began and 2-3 times over budget is typical. The same is true of projected waste disposal costs and accident cleanup estimates are even worse.

So far as the lifespan of solar panels, half of the ones Jimmy Carter put on the White House in 1979 (admittedly not PV but still saves on electricity for heating), are still in operation at Unity College in Maine with no loss in efficiency.

## Create an account

Register a new account