Brace for an electric shock
Germany's 37 million households will soon be paying half as much on their annual electricity bills as Australian households. An average German household pays just $1060, or about $88 a month, for electricity to run their computers, lights and other household appliances, while an Australian household in 2013 will be paying a whopping $2117, or $176 a month, according to the Australian Energy Market Commission (AEMC).
Australian retail electricity prices will rise 37 per cent from 2010-2014 (AEMC), widening the chasm between German and Australian bills and bringing hardship to Australian families already doing it tough from the high dollar and the financial crisis. And it’s going to get worse. As our electricity bills soar, Germany's electricity bills will rise minimally. According to the German energy agency (DENA), bills will rise just 20 per cent by 2020. For most families this will be offset by the legislated German-wide 20 per cent energy efficiency target, which will result in a further reduction of electricity consumption in German homes, reducing bills even more.
This may be contrary to what you've read in the popular press and understand about relative electricity costs between our two countries. Germans and Australians are basically paying the same amount for each retail unit of electricity at the meter, with Germans paying 0.31 Australian cents today which Australians will match next year (0.31 cents in 2013/14). The difference is the volume purchased, as highlighted above. Germany has a comprehensive climate and energy security policy suite that drives renewable growth and energy efficiency across the economy, which has led to average households that use half as much electricity as Australian households.
Germany's low electricity bills are saving families so that they can now spend on the important things in life, but that's not all that Germany's highly efficient electricity sector has achieved with its lower bills for consumers:
1. It has funded the Feed-in-Tariff levy to get the target of 20 per cent renewable energy in the German supply mix 10 years ahead of schedule.
2. Renewable energy is restructuring the German economy for a carbon constrained, climate friendly future, already eliminating 75 million tonnes of CO2 per annum – all inside Germany and powered by German innovation and jobs.
3. By reducing technology costs through large scale deployment, future carbon abatement is made even cheaper.
4. Reducing the already high volumes of Russian gas imports, which are being increasingly seen as a security risk to the nation. (Australian domestic gas supply prices will soon be linked to the high cost Asian LNG market, which is generally more expensive than the German imported gas market.)
5. Lowering the cost of future renewable. For solar the cost per tonne of abatement will eventually be negative. This will occur once Germany gets beyond its incentive program (Feed-in-Tariff) 40GW deployment target in 2015 (Germany has 25GW on the grid today).
6. Helping all economies globally get renewable energy cheaper. This is especially of benefit to underdeveloped nations. The Grameen bank has been able to provide half a million Bangladeshi households an electricity service. This has only been possible due to significant deployments in the west (mostly in Germany) which have driven R&D and scale up to make it affordable for Bangladesh to have lighting and power for other basic services such as driving motors and charging mobile phones.
7. Building a leading dynamic adaptive industry that will compete with the lower cost Chinese production through leading R&D and product innovation, so carving the high-end space.
So how did Germany get itself into a position of having significantly cheaper annual electricity bills than Australians?
Germany's approach as a global technology leader has been energy service-based. It is an approach that really got cemented when the German Greens went into an alliance with the Social Democratic Party (SDP) back in the early 2000s. Hans Josef Fell (Greens), along with Herman Scheer (SDP), promoted significant policies that were about moving the Germany and the world from 19th century fossil fuel-based economies to 21st century renewable-powered clean tech economies.
Germany is reducing their emissions by 30 per cent by 2020 and they have a new renewable energy target at 30 per cent of the nation's supply for 2020 (as they passed the old 20 per cent target in early 2011). Not content with just using half the electricity of Australians, they have an all sector 20 per cent energy efficiency target as well.
Germany now has a 100 per cent renewable energy target for 2050 and given they completed their 2020 target 10 years early, it is quite likely that the Greens' policy position of 100 per cent renewable energy by 2030 will be met. Germany is achieving all this while hitting the lowest unemployment since reunification.
During a cold snap in the last few weeks Germany, with its large share of wind turbines and solar panels, was ‘propping up’ nuclear-powered France, where its old outdated and costly reactors have been unable to meet demand during these most trying of times.
And if you're wondering about other fuel costs, gas is heavily used to heat 46 per cent of German households. Each year the average German household burns just 22,652kWh of gas at 7.6c per kWh while Victorian households heating with gas use 16,666kWh of gas at 5.4c. Germany only burns 35 per cent more gas than Victorian households despite Germany having extremely cold winters, with the lowest temperature recorded in Berlin a freezing -38.8C and average low for the city is -1.6C for the coldest month. This contrasts with Melbourne's lowest ever of -2.8C and average low of 6.0C in July. Again the economy wide 20 per cent efficiency target by 2020 is helping householders in Germany and their 100 per cent renewable 2050 plan includes freeing itself from the burning of imported gas.
German Greens politician Hans Josef-Fell shared the German renewable energy revolution success story of German policy innovation, carbon mitigation and reduction with attendees at the Sustainable Living Festival in Melbourne on the weekend.
Matthew Wright is executive director of Beyond Zero Emissions.
Comments on this article
What if you were all wrong?
One suspects that this is exactly the sort of informed debate that has got us where we are now.
Reminder for everyone that the first major act of Peter Garrett was to dump the rebates for home PV that were put in place by the Liberal/National Coalition. This was the first of a number of domestic PV changes by Federal Labour/Greens that also set the stage for state governments to start changing their treatment of the FIT.
Reminder to everyone that the Solar Flagships was stuffed up by the current Labour/Green Government as well.
No need to blame anyone just look at the actual behaviours in this area.
Only explanation is that a Labour/Green majority in both houses of federal parliament that now stretches almost 5 years .. is clearly bad for the environment.
Peak KWH charges in Australia are definitely heading towards 40c and there is nothing in place that will do anything other than increase the rates.
RE: More Richard Simpson Nonsense
It's embarrassing to quote "MATES" in Germany for your power prices.
The gold standard for German average electricity prices is the European Union's official statistics. The Europeans and Germans do stats much better than Australian's and much better than some mate in Munchen.
There German electricity price is 31c per kWh.
http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Electricity_and_natural_gas_price_statistics
My gmail does not ever send confirmations that I have received emails. Like most people (it's the default in Gmail) I do not have acknowledgements turned on. Email is an unreliable delivery platform. Maybe you should research it. I have not received any correspondence from you in my inbox. You either have failed to deliver it or you are misleading everyone here. What's your qualificationto comment for the benefit of everyone here? Or are you just another astroturfer wasting everyones time?
More Nonsense
Power prices have been referenced by myself on numerous occasions, and my contacts confirm them. They are specific to Germany.And in case they are vastly more expensive than Australia. German prices also contain a "green levy" of 3.59 cents a KW.
Socialist heaven.
My apolgies for not referencing my figures for the break up of heating costs and housing construction.
http://www.webmeets.com/EAERE/2011/m/viewpaper.asp?pid=528
I have emailed you my details to your email address at BZE with succesful delivery, twice.Mate I am far more qualified than you, if that is really important to you. Should not be.Everyone has the right to debate.
I believe your comments are self evident.
You live in another world devoid of reality, and good luck to you if it makes you feel better.
Must go, have to get instructions from Santos.
RE During a cold snap in the last few weeks,who's to be believed
Blue Planet,
German, Spanish Wind and Solar were helping keep the lights on in France. Here is an article about the situation in Germany over the last few weeks. Includign this comment "The solar photovoltaic systems in southern Germany are available and helping the situation a lot," said a spokesperson of the TSO Amprion.
http://www.taz.de/Energiewende-im-Praxistest/!87007/
http://www.reuters.com/article/2012/02/13/markets-europe-electricity-idUSL5E8DD1YA20120213
"German solar power daytime peaks will continue at 80 percent of capacity this week while wind power, which last week weakened, will reach nearly 20,000 MW of capacity or two thirds of the total on Wednesday or Thursday."
Solar and wind are going well. Allowing gas lines to be repacked to peekers during the daytime so they can operate in the early evening.
Here is an example of solar production from a few weeks ago
http://c1cleantechnicacom.wpengine.netdna-cdn.com/files/2012/02/solar-power-germany.png
You can find out more here
http://www.transparency.eex.com/de/
RE: Richard Simpson's Nonsense
A friend in Munich is an embarassingly pathetic reference for the AVERAGE price of retail electricity in Germany. Germany has over 800 retailers of energy dotted around the countryside and all their rates and volumes need to be taken into account to get an average.
The appropriate place to get statistics on AVERAGE retail electricity price is from the European Union. And here they are.
http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Electricity_and_natural_gas_price_statistics
It is obvious that Richard is upto his usual mischief wasting everyone's time and astroturfing.
The average price of electricity in Germany is AUD 31 cents for electricity.
Richard's failure to be able to source correctly on electricity is a complete proxy for your astroturfing behaviour.
If Richard is qualified to make such assertions then he would list his qualifications and not claim falsely that I have received an email from him with them listed.
Where is the Great Green Religion taking us?
Green Germany: Half A Million Families Sitting In The Dark
Many households in Germany are no longer able to pay their electricity bills. As a result, around half a million households are sitting in the dark.
The sharp price increases for electricity and gas is leading to serious payment problems for more and more consumers – even to dark apartments. Because of unpaid bills an estimated 600,000 households in Germany had their power cut off in 2010, said the consumer watch dog Verbraucherzentrale Nordrhein-Westfalen which is based in Düsseldorf. This estimate is based on a survey of local energy providers in Germany’s most populous state.
"Price increases of around 15 percent for electricity and gas in the past two years have made energy for many households unaffordable", said CEO Klaus Mueller. The increasing fuel poverty is alarming. What is more, ever tighter household budgets and regularly lacking competence in keeping personal finances in check are turning claims arising from unpaid energy bills quickly into an insurmountable cost trap.
Three-quarters of the 58 companies that responded to questions from the NRW consumer group reported growing problems related to energy debt and power outages. In 2010, the surveyed utilities in North Rhine-Westphalia alone sent out three million reminders for unpaid electricity bill. They issued 340,000 blocking threats and cut off power to 62,000 customers.
Wednesday, 22 February 2012 11:09 Die Welt
Re During a cold snap in the last few weeks,who's to be believed
Der Spiegel online is saying exactly the opposite regarding your power sharing assertion. To quote "For weeks now, the 1.1 million solar power systems in Germany have generated almost no electricity. The days are short, the weather is bad and the sky is overcast" It goes further "Because of the poor electricity yield, solar energy production also saves little in the way of harmful carbon dioxide emissions" and another "The relationships are just the reverse for wind energy. For the same cost, wind supplies at least five times as much electricity as solar, while hydroelectric power plants generate six times as much.
My refs:
Re-Evaluating Germany's Blind Faith in the Sun
Solar Subsidy Insanity Will Cost Consumers
Anyone Would Think You Were In The Labour Government Ministry
Facts re electricity increases are pretty clear. 37% seems a little low maybe.
Think we should all accept that Germany are doing things very differently and getting different outcomes on a whole range of measures. Also beyond dispute.
So bizarre to see all of this angst from the usual culprits .. says who, told you, etc etc
But go back to the get go when Germany started doing things differently. A very strong economy that used incentives to drive things like domestic PV. Incentives initially, high feed in tariffs.
Simple clear achieveable targets. Not punishing industries but incentivizing change.
Look at us. Punish the polluters. Compensate low income households even if they don't change their behaviours. Tax high income households many of whom will hardly be affected by the electricity price increases. Put a carbon tax in place that is too low to make a real difference and so flawed in its execution that it will take hundreds of public servants to police the industries that are being punished.
Tragically for Green movement in this country none of what is in place at the moment will take us anywhere near the future Germany is creating.
Nonsense
Must be right, you do get upset.
Suggest you become more rational, and argue your case properly, or you make a further fool of yourself for all to see.Your facts are fantasy, and opinion.Your articles are representative of the normal press, with no substance.It is not 2103 yet, and price rises will probably have more to do with the carbon tax.
I am qualified as you know, having sent you my qualifications to your email address.
However, having said that, anyone is entitled to their views, and the last time I looked this is not your personal blog. Or am I wrong?
If you disagree, please reply with properly referenced material, and not brochures and opinion pieces.
German prices are above 34 cents per KW, cobber, as my friends in Munich informed me today. More up to date than your info.Gas is increasing dramitically as the Russians apply the screws.We all know where oil is going.
Please read my previous posts regarding heating costs, which are in addition to electricity.
By dear
RE: Richard Simpson's Nonsense
AEMC is gold standard for electricity prices
31cents is the average Australian price in 2013 as per AEMC projection.
Official EU stats show that German price is 31cents.
It is polite to avoid wasting the time of people reading these columns. To avoid wasting their time use gold standard references.
And if you are unqualified or underqualified to comment then best keep your ideas to yourself.
N.B. It is alledged that Richard Simpson is an astroturfer.
Nonsense
Wow, must being getting close to the facts.
You do yourself no favours.
Nonsense
Why do you resort to personal attacks, when presented with facts.Odd stuff
I am more qualified than you as you know, and you are being dishonest again, why?
RE: What is an astroturfer
Someone who stalks columns to deliberately spread FUD - Fear Uncertainty and Doubt.
It is alleged that Richard Simpson is an astroturfer.
RE: Richard Simpson's Nonsense Astroturf
Richard Simpson is not qualified to comment on this subject, and embarrassingly uses energy.eu a commercial website for his energy stats rather than going to the EU official stats.
I rest my case.
And now he is having a go at Doug who is a regular honest contributor not an astroturfer.
Quotes
Doug,Wiki is not a reliable source. Please assess your web sites in future.
Regards
Brace for an electric shock
In light of Michael's article "Brace for an electric shock"
In a speech, the Federal Minister for Energy, Martin Ferguson, said that feed-in tariffs are technologically prescriptive and ideologically based, rather than being a market based mechanism. In response to the German feed-in tariff for solar, he suggested that Germany's solar subsidy meant German consumers paid more than €1 billion in additional power bills in 2007 to generate around 0.5% of Germany’s gross electricity consumption, suggesting that the policy does not deliver value for money. He also suggested that an Australian solar feed-in tariff may lead to greater PV panel imports rather than a significant expansion of Australian production.[6] However commentators have suggested that Martin Ferguson's comments are ideologically driven and do not take into account the Merit Order Effect which in some instance negates or almost negates the cost of funding FiTs and in other instances shows funding FiTs delivers a net dividend to consumers.
Look at the speed Germany has taken on PV and is 10 years ahead of target, the cost of the FIT is not worth mentioning. Show me where the down side of the German experience is.
I sometimes wonder how our politicians get the job.
Thank God for the Greens!
Doug
Nonsense Continued
Discrete model: space heating type
Oil Oil-fired heating system 0.345
Gas Gas-fired heating system 0.481
District District heating system 0.119
Electric Electric heating system 0.041
Solid Solid fuel heating system 0.014
Continuous model: fuel use Mean SD
Oil Annual expenditures on fuel oil (in thousand Euros) 1.024 0.542
Gas Annual expenditures on gas (in thousand Euros) 1.030 0.522
That is correct, the majority of heating is gas and oil fired, not district heating as Wright falsely claims. District heating is only 11.9%.
That adds over 1000 Euros to the average energy bill of a German home.
Further nonsense regarding energy efficiency is shown as follows:
Dwelling attributes
Yr48 1 if house built before 1948 0.277 0.448
Yr71 1 if house built in 1949–1971 0.298 0.458
Yr90 1 if house built in 1972–1990 (base) 0.285 0.452
Yr03 1 if house built in 1991 and later 0.139 0.346
Detached 1 if dwelling located in a detached house (base) 0.374 0.484
Row 1 if dwelling located in a row house 0.189 0.391
Apt 1 if dwelling is located in an apartment building 0.437 0.496
Ren 1 if heating retrofitted within last 5 years 0.096 0.295
It is obvious that Wright has never been to Germany, and has no idea about recent housing construction. Most houses in Germany are not recent construction, and have very poor energy efficiency.
In addition, estimates are that ridiculous subsidisation of solar cells has cost the German economy between one and €200,000,000,000.
The energy costs for those who live in Germany and Europe as well, a far in excess of what Australians pay, and would appear that Wright is somewhat disingenuous.
Would never want the facts get in the way of anything Wright pontificates.
Nonsense
More dishonest nonsense from Matthew Wright.
In Germany, 20% of total energy use is in residential areas, and in Australia it is 8%.
The average consumption per household in Germany, is 3458 kW, and in Australia 6570 kW.
The cost per kilowatt in Germany, is €.2781, equates to 34.9 cents Australian.
I have confirmed this by phoning my friends who live in Munich, today. In addition, they advise me that their energy rates are to rise significantly over the next few years, and there is local concern opposition to these rises. Gas in particular is to rise in the next year, to supply concerns from Russia.
Additional references,
http://www.worldenergy.org/documents/rfa.pdf
http://www.energy.eu/
In addition, the consumption per capita residential and Germany is 1742 kW per year. In Australia it is 2700 kW per year and as there are 2.4 persons per household in Australia, as against two persons per household in Germany, this makes a difference to the figures quoted by Wright.
Therefore the cost per person electricity only in Germany is $592 Australian, and $561 per person in Australia.
http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/4102.0Main+Features80March%202009
What Matthew Wright does not inform you is that, he has left out the heating costs of the average German dwelling.
RE: Sources
Cost of electricity is here. Slightly higher than DENA's indicative or example range. The DENA article is there for the 20% cost increase projection which is the point of it, hence why they are only giving an example of costs.
http://epp.eurostat.ec.europa.eu/statistics_explained/index.php?title=File:Half-yearly_electricity_and_gas_prices,_2011s1_(EUR_per_kWh).png&filetimestamp=20111118080005
0.253 * 1.2285 = AUD 0.31
@ Tony Lustri
If we want to account for lower electricity bills from rooftop PV we have to account for the the capital cost of that system, e.g. through depreciation. I see no mention of such cost.
Sources
Matthew,
Where did you get your figures about how much Germans are paying for electricity?
The DENA press release says an average four-person household uses 4,500 kWh, but then only uses an "example" price of €0.24 (i.e. it's not claming those are actual prices). At that example price, DENA calculates yearly costs for its household of €1080, or AU$1340 at current exchange rates.
At your stated rate of AU$0.31, 4,500 kWH would cost even more: $1395
RE: Brace for an electric shock
Facts are that Bjorn Lomborg isn't telling the entire story and is in effect misleading the public.
Australian households will buy 7300kWh @ 31c kWh next year due to huge price hikes according to the Australian Energy Market Comission (AEMC)
http://www.aemc.gov.au/Market-Reviews/Completed/Possible-Future-Retail-Electricity-Price-Movements-1-July-2011-to-30-June-2014.html
Germans pay 0.25 eurocents or AUD 31c kWh this year, but prices are increasing at a much slower rate than in Australia where we are copping 37% increase in electricity bills from 2010-2014.
http://epp.eurostat.ec.europa.eu/statistics_explained/index.php?title=File:Half-yearly_electricity_and_gas_prices,_2011s1_(EUR_per_kWh).png&filetimestamp=20111118080005
The key statistic that matters is that Germans buy just 3400kWh of electricity while Australian's buy 7300kWh. Meaning that each year Germans have watched TV, played the stereo and cooked dinner on their induction cooktop using half as much electricity as Australians and with a bill that is half as big.
That is important - because overall energy service is significantly cheaper (half of) in Germany than in Australia for what they get.
Brace for electric shock
Bjorn Lomborg states that Germany now pays the 2nd Highest price for electricity in the developed world (exceeded only by Denmark)
What are the facts?
RE: German solar incentives strong
A simple look at the Reuters newswire and you can find a report on where the government is at with its support for Solar.
http://www.reuters.com/article/2012/02/22/us-germany-solar-idUSTRE81L1LY20120222
PV has passed grid parity, but the German government is still offering additional support through gross metering at a rate that makes it profitable to be an exporter. So it is not only profitable to provide your own electricity it is profitable to export as well thanks to the ongoing Feed-in-Tariff.
Germany installed 3,000MW over the Freezing winter christmas holiday break, and (yet to be verified) as I understand it has been installing at a rate of 2,000-3,000MW in Jan and Feb and will do the same in March before an additional trim to the subsidy level (which is how it is designed - to ween the source off support) comes in play on April 1 or June 1 depending on the German upper house.
Wind is also doing fine in Germany and a new emphasis on installing more wind turbines will come into play this year. This will bring Germany more into line with Denmark, the country that will be 50% wind powered by 2020.
Solar subsidies axed
I thought, correct me if I'm wrong, that German just axed its feed in tariffs for solar energy, hence the dramatic drop in price to the consumer.
RE: Heating Oil
Shane,
I have given Fossil Gas as the example for space heating as it has 46% penetration, which is higher than other sources. Many of the houses are on district heating and pay much lower rates than the fossil gas or heating oil households.
Victoria is the significant state with a heating load but it is nothing like what they have to go through in Germany. If you took a Victorian house and transplanted it to Germany then the amount of heat used to keep it warm would go through the roof.
Heating oil
Germans utilise a third energy source for their houses that Australians do not - heating oil.
I guess the interesting comparison is the total energy consumption of German households versus Australian households. Of course, you would then need to adjust that data for the average number of heating/cooling degree days in each country to get a like-for-like comparison.
$2 per litre fuel doesn't count for much
Germany's driving distances are much less than Australia's, and with better public transport they make fewer trips by vehicle anyway.
Okay, so Australia is constrained by the need for long connectors. The solution is to build our fleet of nuclear power plants immediately adjacent to our metropolitan areas.
Or, we could all go solar (with deep cycle battery banks for night time, LED lighting, watching Biggest Loser while pedalling on our lounge room exercise cycles).
Point of article
That Germany supports a whole lot of programs some of them are funded via electricity bills.
And they still have much lower bills than us.
They are getting 20% renewable electricity rising to 35 or 36% by 2020 and yet they will still be paying the same as us per unit in 2014, but buying half as much.
This is because the whole comprehensive policy framework for buildings efficiency, energy generation etc, is about delivering energy service. The energy service we want is computing power, television viewing, comfort and so on. Not kWh delivered. kWh delivered are just one way of achieving that.
And we can't just substitute Energy Efficiency for doing anything else. Just like the Germans we need to do significant energy efficiency mining concurrently with the rollout of renewables.
The rising cost of fossil fuels
Currently the subsidies by both Australian federal and state governments for the production and use of fossil fuels are large, tens of billions of dollars. As these subsidies are wound back energy, not just electricity prices will rise. Once global prices for coal and gas filter back into Australian prices it will become economically viable/imperative for all to increase energy efficiency and install renewable power.
Few realise that the lives of all fossil fuels are very limited, all fossil fuels will have declining production within a decade or so, Oil production is already on a production plateau, and coal will soon follow, and it is only shale and coal seam gas that has put question marks over the life of natural gas.
Dan