Germany subsidises cheap electricity for neighbours
15 April 2013
By Sofia Mitra-Thakur
Germany's neighbours enjoy cheap imported power subsidised by Berlin's green energy policy and paid for by German households, analysts say.
Generous subsidies have boosted renewable electricity generation, and created a German green power glut. But Germans themselves do not see lower prices, which are restricted to the wholesale market - in fact the opposite. Instead it is their neighbours whose bills benefit thanks to cheap imports from Germany.
International Energy Agency data for 2012 put household electricity in Germany at $352 (£230) a megawatt hour, Dutch electricity at $238 (£155), Switzerland at $222 (£145) and France at $187 (£122).
When Chancellor Angela Merkel's government accelerated the nuclear exit in 2011 and set the country on a course to switch to renewable energy, some experts warned that there would be power shortages as a result.
But power trade statistics from the biggest electricity market in Europe not only dispel this notion, they also show that German households subsidise power supplies elsewhere.
"The Germans have taken on a disproportionate share of the high cost of renewables via the support payments," said Kornelis Blok, director of science at Dutch consultancy Ecofys.
"These leave a burden on the household price. So who is in fact paying for cheap Dutch power? It is the Germans."
Despite its nuclear exit, Germany remained a large exporter of electricity in 2012, especially to the Central West Europe (CWE) market region of France, Benelux and Germany and into the Alpine states of Switzerland and Austria.
Germany exported 67.3 billion kilowatt hours (kWh) of power last year compared with 42.8 billion kWh of imports, data issued by the federal statistics office and the industry statistics group AGEB show, although they say that this includes transits and non-commercially traded volumes arising from grid balancing.
German electricity seems analogous to American pharmaceuticals where American consumers bare a disproportionate burden towards the development of drugs. The only only difference is that German households enjoy generous subsidies to produce the electricity. Those that have panels on their homes are likely saving on electricity. But then again seniors do get subsidies for drug spending when they spend beyond the donut hole.