Germany Could Face Customer Revolt Over Green Energy Costs
Der Spiegel, Germany’s leading weekly news magazine, reports this week that Germany’s aggressive renewables program “has come with a hefty price tag for consumers,” especially the poor. Though no immediate action is expected before national elections in two weeks, there may be new initiatives soon after, as “government advisors are calling for a completely new start.”
The article is notable not only for its length and depth, but also because Der Spiegel is generally characterized as left-liberal in its inclinations and, therefore, would not be expected to be so critical of a program advanced by its very readers—the socialists and Greens who adopted the program more than a decade ago.
But first let’s accentuate the positive: The “feed-in tariff” put in place at the end of the 1990s has been a hugely powerful lever in driving development of renewable energy in a country that is itself one of the world’s major markets and a top incubator of new technology. The law and its successors established schedules such that anybody installing any of several types of renewable generation can sell the electricity they generate into the national grid at prices guaranteed over time. The premium prices are covered out of a pool funded by an electricity surcharge levied on all German power consumers.
To a remarkable extent, Germans so far have been willing to pay those prices, for the sake of making the country a world leader in environment-friendly power technologies. But today, says Der Spiegel, the prices are beginning to look not just intolerably high and unsustainable, but in some ways unfair and perverse in their effects. The surcharge, already high at 5.3 euro-cents per kilowatt-hour, is slated to rise 20 percent to between 6.2 and 6.5 cents/kWh, according to the government. In large part because of the surcharge, Germany’s electricity costs are among the highest in Europe and could soon be among the highest anywhere in the world.
Without a change in course, says the government, costs could rise to 40 cents/kWh by 2020. At present-day prices, the average German family of three pays about 90 euros per month for electricity, the equivalent of about US $135—about twice as much as in the year 2000.
The high rates have been affecting less-advantaged members of society disproportionately, argues Der Spiegel, . “…[R]enewable energy subsidies redistribute money from the poor to the more affluent., as when someone living in a small rental apartment subsidizes a homeowner’s roof-mounted solar panels through his electricity bill.”