Germany’s green energy policy to force consumer price rises

• 11 years ago (2012-08-27)
• Junior Isles

Europe 1061 Nuclear 640 Renewables 751

---

Germany's green energy strategy is destined to cause upset as the costs of new renewable power generation units and transmissions must be passed on to consumers, Tuomo Hatakka, head of the German unit of Swedish energy group Vattenfall has said.

"In the next 10 years some investments totalling €150 billion ($187.8 billion) will be necessary," said Hatakka. "I assume that the bill for private customers will rise by up to 30 per cent to 2020."

He also anticipated delays in shifting away from nuclear and fossil fuels towards wind and solar, citing delays in important transmissions projects connecting offshore wind parks to the grid.

Vattenfall Europe AG, parent group to Vattenfall, took a Kronor10.2 billion charge after the enforced closure of its German nuclear plants last year.

Vattenfall plans to expand further into wind and biomass but still operates highly polluting brown coal-fired power stations in eastern Germany which it built in the 1990s.

German consumers must ultimately pay for subsidies underwriting renewable generation, which are paid above market rates under German law, while new transmission grids carrying the power to consumption centres will also need to be financed, Hatakka said. "This is not explained often enough," he noted.

Germany currently has the second-highest power prices in Europe, and a continuing price spiral potentially risks discouraging spending and impairing industry's competitiveness.

Hatakka noted that there was no threat of power shortages while new installations were brought online due to recent overcapacity, itself thanks to the expansion of renewables in recent years.