Clean Power

Published on September 12th, 2012 | by Zachary Shahan


Graph: German Wholesale Electricity Prices Down, Retail Prices Up

September 12th, 2012 by  

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.

The green line above is the price of electricity on the German electricity exchange. The red line is the average price of electricity for households. The other lines are for commercial clients and special customers (notably, their prices have also risen).

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.

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About the Author

is tryin' to help society help itself (and other species) with the power of the typed word. He spends most of his time here on CleanTechnica as its director and chief editor, but he's also the president of Important Media and the director/founder of EV Obsession, Solar Love, and Bikocity. Zach is recognized globally as a solar energy, electric car, and energy storage expert. Zach has long-term investments in TSLA, FSLR, SPWR, SEDG, & ABB — after years of covering solar and EVs, he simply has a lot of faith in these particular companies and feels like they are good cleantech companies to invest in.

  • Chris B

    Part of the reasons for the increases have been increased taxes from the government on the sale of electricity.

    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.

  • kenchandammit

    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.

  • Chris

    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.

  • Pingback: German Electricity Prices Rise as Utilities Increase Their Profit Margin from 1.1% to 8.2% - CleanTechnica()

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