Graph: German Wholesale Electricity Prices Down, Retail Prices Up
Last week, I published a post on the point that the retail price of electricity in Germany has risen at the same time that whole electricity prices have dropped. Basically, utility profit margins in Germany have just gone up, and renewable energy has been used as a scapegoat for rising consumer energy prices.
One of our readers actually dropped a tremendously useful link in the comments, a link which included the graph below.
Now, as you can see, the graph is in German, but an explanation of it was translated for me by Google Translate, and I’ve stuck the key points in the caption below.
I don’t think it gets much clearer, coinciding with the penetration of renewable energy on the German grid (and as it has moved away from nuclear power), there has been a drop in the wholesale price of electricity. But, for some reason (a rather obvious reason), those cost reductions have not been passed on to customers.
Funny that we should run across this at almost the same time as it has been revealed that Germany’s electricity grid also saw record reliability in 2011, at the same time as it saw a huge explosion in renewable energy on the grid — completely counter to countless anti–renewable energy claims shouted from the rooftops (er, on blogs, in major media, and in political forums).
Funny thing, isn’t it? The seemingly strongest (or at least most proliferated) arguments against renewable energy aren’t just wrong — they’re the opposite of what reality has now shown us.
Have a tip for CleanTechnica? Want to advertise? Want to suggest a guest for our CleanTech Talk podcast? Contact us here.
CleanTechnica Holiday Wish Book
Our Latest EVObsession Video
CleanTechnica uses affiliate links. See our policy here.
Pingback: German Electricity Prices Rise as Utilities Increase Their Profit Margin from 1.1% to 8.2% - CleanTechnica
I don’t know anything about how the German utility industry is regulated and how it passes along costs and savings to customers, but is it possible that utilities suffered significant losses from 2006-2008 when their costs were higher than their revenues, and now they are able to reimburse those losses for a period while revenues are higher than costs?
It would be interesting to see the green line extended back a few years as well, to see how it correlates with the other lines.
Without more information, I would hesitate to assume that something nefarious is going on here.
the same thing did cross my mind. and i’m trying to get more info on it.
How about a line on the graph which shows the cost of electricity from traditional sources so the two costs can be compared. That is what really matters in the whole debate over solar power. The fact that the most important factor is omitted makes it seem like the information is biased.
Part of the reasons for the increases have been increased taxes from the government on the sale of electricity.
http://www.treehugger.com/green-investments/german-electricity-tax-rises-50-support-renewable-energy.html
Another reason is that typically power companies purchase and sell power in long term agreements, usually 3-10 years. Most companies do this with everything ( a notable example is Southwest Airlines in the US during the Oil price skyrocket in 2007-2008).
And finally the third reason is power companies need to make back their money on their assets. If they built a coal plant and it takes 30 years to pay off, but they have had to idle it most of the time, they still need to pay off those 4 remaining years.
Basically consumer prices should start coming down within 1 year or 2, as prices continue to fall, as long as the governments don’t keep increasing the taxes on electricity.