Fossil fuel power sources cost more than renewables in Germany

» By | Published 08 Apr 2013

If all the costs of fossil fuel power generation were detailed in German power bills they would exceed the costs of renewable energy “by a wide margin”, a study by Greenpeace Energy Germany and the German Wind Energy Association (BWE) says.

Currently German power bills clearly outline the cost of the EEG – the support that is channelled to renewable energy and charged to the consumer as a levy – but the costs of conventional fuels are hidden. “State incentives for nuclear and coal are sometimes part of rules that increase the price of power and sometimes part of government budgets. In both cases consumers cannot directly see the full cost in their power bills,” the report says.

In 2012 the EEG levy cost the consumer €c3.59 per KWh, while the report estimates that if there were a similar levy for fossil fuels it would cost €c10.2 per KWh – almost three times as high as the EEG.

The news comes as Germany enters a critical period of debate on the cost of its stepped-up “Energiewende” – or energy transition away from nuclear and fossil fuels towards renewables following a decision taken by the German government and Chancellor Angela Merkel in May 2011. On 1 January, the EEG – which effectively pays for Germany’s energy transition – was raised to €c5.3, a move which prompted German Environment Minister Peter Altmaier to announce in late January a two-year freeze on the EEG and a cap on raises after that.

While the final outcome of the debate is still to come, it is worth bearing in mind that not only are some fossil fuel and nuclear costs are hidden in power bills, but that fossil fuels and nuclear have been subsidised for decades at a cost of many more billions than subsidies to renewables. Moreover, the societal and environmental costs of fossil fuels and nuclear are high and will remain high.

In figures, the report highlights that the German government has paid a lot more to conventional fuels compared to renewables in direct and indirect energy subsidies between 1970 and 2012. While hard coal-fired electricity generation received a total of €177 billion in financial support, lignite received €65 billion, and nuclear received €187 billion. All renewables, meanwhile, received €54 billion over the same period, the report said.

The study then looks at the additional costs to society and the environment of fossil fuels and nuclear compared to renewables – which are only included to a minor extent in power bills. “The resulting price per of a kilowatt-hour of wind power for society in 2012 is €c8.1…in contrast, the total cost of power from lignite and hard coal add up to €c15.6 and €c14.8 respectively, with nuclear reaching at least €c16.4 per KWh,” the report says.