Wednesday, February 23, 2022

Why Are Germany's Electrical Rates So High?

 One could write a 500-page book on this business....but I'll try to summarize these in 40 lines:

1. Fukushima changed the whole nuke energy landscape.  Up until that point, Germany was walking a very difficult path with the disposal of nuke material, and the worry about 'problems'.  After Fukushima, nuke energy's future in Germany was doomed.  You couldn't build a business plan around them, and the close schedule is set now (all close by the end of 2022).

2.  The 'filter' business.  Imagine yourself a kid with one great chocolate shop in the village.  Oma gives you 2-Euro daily for your 'dose' of chocolate.

One day, you decide that fine chocolate is better than average chocolate, and the cost is 2.10.  The ten cents is from your pocket, on top of what Oma gave you.

A month, a chocolate 'sin' tax is added to the particular Chocolate you desire (10-percent), making your cost now 2.31 Euro.  The .31 cents is from your pocket.

Several months pass, and there's some peer pressure on you to only buy 'pure/clean' chocolate, from Peru....picked by virgin ladies, and paid a fair wage.  Your new cost is 2.70, with the tax at 27 cents....meaning your Chocolate cost is up around 2.97.....meaning from your pocket, you pay .97 cents with Oma's two Euro. 

Electricity works the same way.....you are convinced that taxes should be X, and that 'pure/clean' power....must be Y.  

Germany's average cost per KwH?  32 cents.

Croatia's average cost per KwH?  13 cents.

Latvia?  14 cents.  

3.  The C02 tax plays a role.  Per 2021, tax stands now at 69 Euro per ton (of Carbon).  

4.  Fewer Germans on the grid, or relying upon only the grid.  If you drive around.....you tend to notice it's popular now (as of 2018, one-million homes in Germany have some form of solar).

While not the entire answer....out of those one-million homes, you have to figure that most use a marginal amount of power (mostly in the cloudy periods) from the grid, and rely mostly upon their own panels.

5.  Up until the end of 2021, there was a renewable energy tax which existed.  Per KwH, it was set at 6.5 Euro cents.  Today, it's at 3.72 Euro cents per KwH.  

As you might guess....the higher than cost go up....the more inflated that taxes are, and end up in the government's pocket as a sort of 'sin' of energy consumption.  

Around two years ago, I challenged my wife (German in nature, and the record keeper of the house) to pull the energy consumption from 25 years ago (at the old house).  Today, I probably use 10-percent less energy....but pay almost double of what I did 25 years ago.  

LED lights?  Around 98-percent of the house is now LED.  Energy saver freezer/refrigerator?  Yes.  Use of the dryer only five months of the year?  Yes.  Dishwaser use?  Probably five times per month.  

If you went down the entire list.....I've done everything to have less consumption than two decades prior.  

They featured a German guy (probably near 70 years old) last year on HR (my regional TV).  The tech team came in and reviewed the guy's entire house.  He'd bought a premium refrigerator back in the 1990s and was still using it in the basement.  He still had his high-cost premium freezer from 1985.....which still worked.  He had a washer/dryer that were almost twenty years old (he'd kept them repaired and functional....being fairly proud of that).  

Energy consumption for the guy?  The tech team did the numbers and said if he'd dump all of the items, and go for low-energy use items.....within a couple of years, they'd pay for themselves, and his electrical bill would drop by 50-percent.  

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