24.04.2013
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Cost of electricity

German industry power prices up 3.7% since 2008

In February, German environmental organization Deutsche Umwelthilfe (DUH) held a press conference on how German industry is faring under the switch to renewables – against the backdrop of charges that higher power prices will scare away energy-intensive industry. Today, we sum up the findings, which have not yet been widely distributed in English.

Since 2011, critics of Germany's energy transition have argued that the country is going to scare away its energy-intensive firms. In its Fact Check (see this PDF in German), the DUH addresses some well-known concerns: power prices for industry are "around 40 percent more expensive" in Germany than in France and the Netherlands and nearly 15 percent higher than the EU average.

First, the organization found that the price difference between Germany and the EU-27 has actually not changed significantly over the past five years and has even dropped since rising slightly in the second half of 2011. The price gap therefore predates the sudden nuclear phaseout of March 2011.

 - An overview of power prices paid by industry from 2007-2012 reveals that France has seen its prices go up perhaps even more than Germany has. Likewise, prices in the UK have risen from just above eight cents per kilowatt-hour to around 10 cents, an increase of nearly 25 percent.
An overview of power prices paid by industry from 2007-2012 reveals that France has seen its prices go up perhaps even more than Germany has. Likewise, prices in the UK have risen from just above eight cents per kilowatt-hour to around 10 cents, an increase of nearly 25 percent.
DUH

Likewise, French industry power prices have been consistently lower than those in Germany in recent years, and the gap has been wider than it currently is. The DUH comments, "The question is why the difference in price between Germany and France is now suddenly an indicator for the effects of the energy transition."

The organization also found that the price difference between the Netherlands and Germany has fluctuated historically and actually shrank in the first half of 2012. Overall, however, the Netherlands is the only country investigated which seems to show a clearly widening gap in industry power prices since the nuclear phaseout of 2011. The DUH attributes that change to greater Dutch imports of power from Germany; in other words, German power exports to the Netherlands are the reason why the gap is widening.

Prices in Italy and the UK were also investigated. The Italians turn out to have reliably higher industrial prices in Germany, while the price gap has fluctuated between Germany and the UK in recent years, with power sometimes being cheaper in Germany.

 - Industry as a share of GDP in Germany, Italy, Spain, and France. Obviously, France's lower industry power prices are somehow not stopping the country from deindustrializing, whereas the nuclear phaseout of March 2011 does not even register in the German curve. Apparently, the greatest threat to German industry was the banking crisis.
Industry as a share of GDP in Germany, Italy, Spain, and France. Obviously, France's lower industry power prices are somehow not stopping the country from deindustrializing, whereas the nuclear phaseout of March 2011 does not even register in the German curve. Apparently, the greatest threat to German industry was the banking crisis.
Helaba

The DUH rebuts a claim that German industry power prices rose by 40 percent from 2007 to 2012, pointing out that the methodology in the statistics on which that claim is based changed in the second half of 2007. Adjusted for that change, German industry power prices rose by a mere 3.7 percent (see chart) from 2007 to 2012 – and a mere 16 percent going back to 1995.

As Renewables International pointed out last year, other energy prices have risen much more steeply. For instance, the DUH estimates that industry prices for natural gas rose by between 22 and 32 percent from 2007 to 2012. (Craig Morris)

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6 Comments on "German industry power prices up 3.7% since 2008 "

  1. Kevin Meyerson - 25.04.2013, 15:52 Uhr (Report comment)

    Great article. I'd love to see an analysis of power prices in Japan vs USA vs various EU countries including Germany as well. Wish I was able to do the analysis myself.

  2. heinbloed - 24.04.2013, 14:53 Uhr (Report comment)

    Correction
    I wrote:
    " For a first time on a working day (25/04/2013) the peak load price on the spot market is lower than the base load price - in France and in Germany as well, in paralel: ....."
    The price for peak load is actualy 36 €cents higher than the base load price perMWh, my fault.
    To make-up for this mistake I'm willing to pay the difference for the suffering heavy industries :)

  3. heinbloed - 24.04.2013, 14:15 Uhr (Report comment)

    Electricity prices in the EU at the EEX are narrowing, thanks to RE.
    For a first time on a working day (25/04/2013) the peak load price on the spot market is lower than the base load price - in France and in Germany as well, in paralel:

    http://www.eex.com/de/
    The IWs vision on high German/French/European electricity prices seems to be the last report from this dark corner, old data mixed with outdated views prepared to a useless piece of propaganda ....
    The REs are shaking-up the power market more than an earth-quake. The lost positions can't be re-built.

  4. heinbloed - 24.04.2013, 13:50 Uhr (Report comment)

    The aluminia smelter TRIMET in Northern-Rhein-Westphalia uses about 1% of Germany's electricity production:

    http://wibke-brems.de/2011/06/01/besuch-in-aluminiumhuette-in-essen/

    http://www.welt.de/print/wams/nrw/article13450808/Aluminiumhuette-unter-Druck.html

    And there are many more.

    Aluminia smelters go to the cheap and relyable renewable energy countries, like Iceland for example:

    http://www.nordregio.se/en/Metameny/About-Nordregio/Journal-of-Nordregio/Journal-of-Nordregio-no-2-2011/Aluminium-overtakes-fish-in-Iceland/

    http://arcticecon.wordpress.com/2012/02/15/aluminium-smelting-in-iceland-alcoa-rio-tinto-alcan-century-aluminum-corp/

    http://www.nzz.ch/finanzen/uebersicht/boersen_und_maerkte/billigstrom-waelzt-die-aluminiumbranche-um-1.18064980

    The combination of falling electricity prices (thanks to renewables) and the elimination of trade barriers as well as lowering transport costs leads to a de-nationalisation of traditional heavy industries.

  5. heinbloed - 24.04.2013, 13:35 Uhr (Report comment)

    The DUH study/publication is an answer to a published IW-view and slams it as being incorrect on purpose, quote:.
    " Die gezielt selektive Wahrnehmung der IW-Betrachtungen ..."
    The IW is the establishedpower industry's political propaganda organisation.
    Nothing what is is 'reported' by the IW (they themself call their papers a 'view' or 'vision' ) can be found in the official statistics. Well, selectivly .... Check the prices for electricity at the EEX yourself.
    The French heavy industry is losing out to the German competitors thanks to high electricity prices, higher in France than in Germany:

    http://www.power-eng.com/articles/2013/02/hollande-on-the-ropes-as-french-industry-faces-higher-power-pric.html

    http://www.bloomberg.com/news/2013-02-06/hollande-draws-french-industry-ire-as-nuclear-energy-edge-fades.html

    French heavy industry representativs are openly threatening president Hollande to leave France because of incompetitive electricity prices.
    These already high electricity prices in France are protecting the dead atomic industry for a few more years, allowing cheap electricity imports would drive it down within months. The atomic industry (EDF) has absolute no financial reserves to create alternative power suplies. It is the milk cow of the nation's financial politics, dry.
    By no way the German heavy consumers are faced with high, incompetive electricity prices, the prices are de facto going down. Thanks to extreme corrupt politicians:

    http://www.handelsblatt.com/politik/deutschland/protokoll-des-aufsichtsrats-steinbrueck-bot-thyssen-krupp-gefaelligkeiten-an/7598904.html

    The opposite to French atomic subsidies is happening in Germany: the small consumers are supporting the big ones in Germany. Whilest it is the oposite in France, the electricity prices for householders there are dictated by Paris. And are below costs. To win elections. And the manufacturers are left to a 'free market' which doesn't allow for cheap imports. So the big consumers have to make-up for the small ones.

    http://www.rechargenews.com/wind/europe_africa/article1316552.ece

    The reason for the heavy industry to establish their manufacturing capacity at a particular place isn't the energy price btw.. It is the predictability of profits. Otherwise all steel manufacturers would be based based in Saudi Arabia or the Iran. .....
    With the shortest outage time for electricity suply (the quality of suply) Germany's industry could compete with foreign electricity prices being well above the energy prices' status quo.
    http://www.bundesnetzagentur.de/cln_1931/DE/Sachgebiete/ElektrizitaetGas/Sonderthemen/SAIDIWerteStrom/SAIDIWerteStrom_node.htmljsessionid=620C058B7DB39676BC0785D252753B33
    The outage time in Germany is about the lowest in the world, not only in Europe. An electric power loss is very expensive for the industry's high consumers. They have to provide for back-up or loose the investment (the kiln, the smelter etc.).






  6. James Wimberley - 24.04.2013, 12:25 Uhr (Report comment)

    Spanish electricity prices for industry rose by more than German from 2007-2012, and by about the same from 2008-2012, with an increase in the share of industrial output (basically because the rest of the economy was driven into recession by puritanical German and EU policymakers). Electricity just isn't that important a cost driver, except for a few oddities like aluminium, which isn't sited in Germany anyway.

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