German electricity prices do not reflect the cost of production.

[Iterate]

I constantly see claims by those who know better that renewables cause high German electricity prices. Not so. I can't only assume those claims are intended to frighten the unwary into accepting the status quo.

The German cost of production, distribution, and advertising is not that much more than in France -about €0.11 to €0.12 vs €0.08-€0.09.

Their base costs for electricity are also not much different than the EU average. I should also note that the German consumer pays more for NG and gasoline than the EU average, and that's not because they've installed solar panels at fuel stations. Water and mandatory trash pickup (with required recycling) are also high.

Here's the difference:

Meanwhile German electricity taxes of 41 percent were also found to be the second highest in the EU, Eurostat reported. Denmark’s electricity tax of 56 percent was the highest, while the European average was much lower at just 26 percent.
http://www.thelocal.de/money/20100528-27497.html

It has nothing to do with the cost of production. Here's where the money goes:

Generation, which varies of course, but an average of ~€0.06
Grid fees are about €0.06
Lower voltage distribution is all underground, which is both more reliable and more expensive. Large industrial consumers(over 10,000 kWh) get a tremendous (and secretly negotiated) discount. Consumers pay for the bulk of the grid costs. Obviously local production benefits the German consumer.

Promotion, metering, and advertising are allowed as part of the pricing. About €0.005 to €0.01

Those three items total about €0.13

The rest
Electricity tax designed to reduce consumption. + €0.0205 (2005 price)
Introduced in 1999, most of this revenue goes to fund state pensions.

Concession charges paid to local municipalities: +€0.0132 to €0.0239
In general, local German property taxes are extremely low, but there's a tax on anyone wanting to do business in the town.

Heat-and-power cogeneration surcharge: +~€0.003
The goal is to have 25% of conventional electricity generation sending waste heat into local netwerks, thereby gaining a 90% overall efficiency for those plants.

Renewable Energy sources act (EEg). +€0.011
This is the tax surcharge that has everyone wound up, with wild claims (mostly by non-Germans) that it's causing everything bad short of mass starvation. In truth it's about 2 to 6 euros, per household, per month.

19% VAT: +€0.04
A source of general revenue channeled to social and local services.

For most households that €0.22 to €0.27/kWh adds up to about €40-€125 per month. It would usually include cooking and hot water.

Sources:
http://epp.eurostat.ec.europa.eu/statistics_explained/index.php?title=File:Electricity_prices_for_household_consumers,_first_half_2011_%281%29_%28EUR_per_kWh%29.png&filetimestamp=20111124164000

www.germany.info/contentblob/.../BMU_ElecFromRESources_DD.pdf. Produced for consumers and slightly dated, but still good.

The net effect of this is that German (and Danish) electricity consumption is about 60% of what Americans use. The Danes use less electricity than the US oil refining sector alone. I've always suspected that the pro-nuclear or pro-coal lobbies are not so much interested in protecting their own technologies as they are in maintaining high American consumption.

As you stare at the 'stat this week you're probably not thinking that you're paying 1/3 of what you might be for electricity and that paying $.35 a kWh could be a good idea, but it works.

And I know the objection that's coming -"I couldn't afford it." But the problem there isn't in high energy prices, it's that the other great renewable -your labor and your skills- are priced way too low.

[JDPriestly]

1. Thanks. Note that the VAT helps pay for healthcare.

And the VAT indirectly protects German industry, German manufacture. It's a great deal for everyone.

By the way, unlike Great Britain and Norway, for example, Germany has no oil.

France mostly uses nuclear. Germany has a great deal of anti-nuclear sentiment, so it probably will never go that route. Aside from the Green Party in Germany, Central Europeans including Germany, are very environment-conscious. That is partly due to the fact that, while they are not landlocked, they have less ocean-coast than some other countries.

[Iterate]

3. I've been thinking about it a little differently, more and more over the years.

The heresy I've come up with is that being environmentally aware is a good start for some, but for most people it will never motivate them enough. This probably isn't the best forum to bring up that idea.

Just looking at the Danes, most of their economy depends upon high value agriculture and tourism. Any hint of contamination and both would collapse. They would be well and truly fucked for generations. Plus, there's no other place for them to go. Lookout Greenland, here we come.

So in that sense, the decision is one one of avoiding an existential threat, one that people internalize. That makes sense in terms of two other things which would do them in -hyperactive consumerism and high, debt-driven growth. They scrupulously avoid both. In fact, here's a headline for today:

UPDATE: Denmark's Foreign Currency Reserves Hit Record High
http://online.wsj.com/article/BT-CO-20120703-709442.html

And of course, having responsible and responsive leadership matters. We're a migratory species after all. Time to migrate, now.

The same things could be said for Germany, with the right cultural adjustments. There's a sense of the frailty of the social order that goes back beyond history. Slow, thoughtful change is the method. They are not a people likely to bet the farm that nothing will go wrong. Their sense of correctness and engineering pride emerges from that caution.

Ok, I'm wandering OT for E/E. If I want to avoid a Link? request I'd better stop here.

[JDPriestly]

5. You don't need to provide a link for me. I've lived in Germany. I know exactly

what you are talking about. Thanks.

[BT021]

2. 35 cents is cheap

look at what Texas is paying!


www.bloomberg.com/energy/

ERCOT, $28.92 per megawatt-hour, peak, firm
(wholesale)

[oldhippie]

4. What?

$28.92 per megawatt-hour is 2.89 cents per kilowatt-hour.

Miss a decimal point on your slipstick, did ya'?

Edit to add: BTW, I am in Texas and I pay 9 cents per kilowatt-hour.

[NYC_SKP]

6. You're really proven with this how little you know about energy.

National average around 12 cents/kwh.

In Hawaii closer to 40 cents.

35 cents is not cheap.

Who are you?