DISCUSSION: Why are German retail electricity prices rising?

This chart suggests that the increase in FIT rates are offset by a decrease in wholesale power prices.

What else might explain rising German retail electricity prices?



Categories: Discussion - Distributed Energy, Energy

10 replies

  1. An argument has been made that some of the rising grid costs (i.e. the difference between retail rates and spot+FIT prices) should be attributed to Renewable Energy. Is it a little or a lot, and what form does it take?

  2. The rising cost of carbon would likely be one of the major reasons for the rising prices. Last month, European Union decided to limit emission permits, creating an additional cost that the industry is passing on to the consumer.

  3. One answer could lie in the spot market price definition. If the latter is the average over each year of the EPEX zone prices (France, Germany, Austria, Switzerland), then a decrease in spot market prices could hide the following trend:
    - An export of cheap German electricity during periods of large renewable electricity production
    - An import of expensive electricity when renewables aren’t producing any power.
    Then the price averages could be low, but the Germans wouldn’t be the ones to benefit from it.

  4. The article in the European Tribune suggests that “household consumers, whom, all else being equal, end up paying higher prices to allow exemptions of big industrial consumers.” http://www.eurotrib.com/story/2013/7/2/174936/9080

    This is another interesting article detailing the development of the surcharge: http://energytransition.de/2013/10/an-end-to-rising-power-prices/

  5. This article provides a nice breakdown of the price increases: http://www.eurotrib.com/story/2013/7/2/174936/9080

    The EEG-Umlage (renewables tariff) has indeed pushed retail prices up, but clearly costs for production, transportation and distribution have increased as well.

    Interestly, the Umsatzeteuer (VAT) has increased not only as it applies to the production, transportation and distribution costs but also proportionately to the other tariffs applied – a tax on a tariff?

  6. Some details about the most recent EEG-Umlage (renewables tariff) developments in Germany:

    1) The German Ministry of Economics is expecting an increase of the EEG-Umlage from 6.2c€/kWh to 7.7c€/kWh by 2020. This implies an additional burden of about €10bn for non-exempt consumers.

    http://www.spiegel.de/wirtschaft/service/eeg-reform-oekostrom-deal-kostet-private-stromkunden-milliarden-a-962844.html

    2) Currently (2/2014), 2,098 companies are exempt from paying the EEG-Umlage, compared to 1,720 in 2013. The top 3 privileged sectors are chemicals, metals and paper. The German Minister of Economics wants to decrease this number by 500.
    http://www.bafa.de/bafa/de/presse/pressemitteilungen/2014/04_eeg.html / please find the map here: http://www.sueddeutsche.de/wirtschaft/eeg-umlage-diese-firmen-profitieren-vom-oekostrom-rabatt-1.1886240 / http://www.handelsblatt.com/politik/deutschland/oekostrom-ausnahmen-weniger-unternehmen-von-eeg-umlage-befreit/9726394.html

    3) The most current EU draft states that exempt companies should at least pay 20% of the EEG-Umlage, but proposes a transition period until 2018.

    http://www.handelsblatt.com/politik/deutschland/oekostrom-ausnahmen-weniger-unternehmen-von-eeg-umlage-befreit/9726394.html

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