Consumers pay an average of approx. 25 cents to their utility for each kilowatt-hour of electricity they use. Today, cheaply produced renewable energies already supply 25 percent of the electricity consumed in Germany. Thanks to their price-lowering effect, prices on the electricity exchange have been falling steadily since 2009: The current price per kilowatt-hour on the Leipzig electricity exchange is approx. 5 cents (for an explanation of how the final consumer price is made up, see the FÖS study „Was Strom wirklich kostet“). Calculations show that the electricity supply costs avoided by renewable energies and the balancing feed-in effect total some EUR 6 billion per year. That adds up to huge savings – and a big boost to the profits of energy utilities. Yet these savings are not passed on to final consumers (see also the report by Ubbo de Witt on 24.8.12).
In particular, energy-intensive industrial companies feel threatened by rising energy prices. Although they have enjoyed generous discounts and subsidies for decades, large consumers complain about the threat to their international competitiveness from “excessive electricity costs”. The result is that small consumers today subsidise to the tune of almost one cent per kilowatt-hour more than 2,000 companies, that profit through the “Special compensation regulation” from tax breaks and exemptions from the Renewable Energies Act (EEG) levy and grid charges.
Key aspects of the current electricity price discussion, which is increasingly developing into a fight over the distribution of energy resources, remain largely unreported. Included here are years of subsidisation of conventional energy generation – EUR 311 billion for the coal industry alone as well as the transfer to tax payers of the disposal risks of nuclear energy companies. Tax payers will also have to shoulder the burden of the law suits and compensation claims for billions of euros lodged by power plant operators such as E.ON after the decision to pull out of nuclear energy. Because of their structure, the large energy utilities, the dinosaurs of energy generation, need more time to adapt to the more flexible distribution and supply structures required for renewable energies.
That is why they welcome the help of initiatives launched by allies, such as the Initiative for Social Market Economy (who could suspect anything negative under this title?), with an annual budget of EUR 7 billion financed by the employer associations of the metalworking and electrical industries. These organisations consider it an act of social responsibility to lobby against the successful medium-sized enterprises involved in renewable energies and their effective instrument, the EEG. With their disingenuous call for “more market freedom”, they resurrect old concepts such as the quota model. This ignores the fact that long-term studies have shown that electricity prices in countries with a quota model are higher, and simultaneously the development of their own renewable energy industry is prevented. Quite apart from this, a quota determined by the state has little to do with a free market economy. Furthermore, after (to date) 40 years of subsidies and power stations that have long recovered their costs, coal, nuclear power and the rest benefit from an enormous, state-financed competitive advantage.
So what is going on? Who will pick up the bill? Who has the money? Who profits from the electricity cost lie? Who can afford to systematically ignore facts that cost consumers dearly? To ignore investments that create more jobs per installed kilowatt than central, large power stations?
It may help to take a look at the balance sheets of the big energy utilities. Here we find the same picture the oil industry has presented for many years. The price at filling stations climbs to dizzying heights, and oil company profits do the same. Last year, high petrol prices gave ExxonMobil a dream profit of USD 41.1 billion. That’s enough to buy Deutsche Bank, for instance. Due to high oil prices, the entire industry recently posted enormous leaps in profit. Another US company, Chevron, booked “only” USD 26.9 billion, still a corporate record. ConocoPhillips reported a profit of USD 12.4 billion.
The Federal Network Agency documented the development of individual electricity price components, revealing that the supply companies’ profit margins, including distribution, increased between 2006 and 2011 from 1.1 to 8.2 percent. For instance, in the first half of 2012, E.ON, Germany’s largest energy utility, made a profit of more than EUR three billion, tripling the result from the same period in the previous year.
“If the companies had been content with a five-fold increase in profits, the net electricity price would not have risen, thanks to reduced grid costs. There would even have been room for a reduction in the net tariff if the utilities had passed on to consumers savings from the purchasing price for electricity which has been falling continuously since 2009.“ (Oliver Ristau: Falsch eingepreist in: Erneuerbare Energien, September 2012)
So much for the question: “Who has the money?”!
Sources and links (in German):
<media 483 - - "APPLICATION, Die Strompreisluege Erneuerbare Energien September 2012, Die_Strompreisluege_Erneuerbare_Energien_September_2012.pdf, 3.0 MB">Artikel von Oliver Ristau: „Falsch eingepreist“ in: Erneuerbare Energien, September 2012</media>
Kurzgutachten: "Auswirkungen sinkender Börsenstrompreise auf die Verbraucherstrompreise" von Gunnar Harms im Auftrag von Bündnis 90/Die Grünen
BEE-Hintergrund zur EEG-Umlage 2013, Bundesverband Erneuerbare Energien e.V. (BEE)
Broschüre des WWF: Mythen und Fakten zur Rolle der erneuerbaren Energien in der Energiewende
"Erneuerbare Energien - der Sündenbock der Kohle- und Atomlobby" vom Umweltinstitut München e.V.
"Kosten für Erneuerbare können schon in diesem Jahr sinken" von Greenpeace e.V.