03-01-2019, 01:30 PM
(03-01-2019, 12:50 PM)EricL Wrote:(03-01-2019, 12:45 PM)Otter Wrote:(03-01-2019, 12:36 PM)EricL Wrote: Electrical costs in Germany have skyrocketed in the last decade as they've switched towards renewables. Germany has the highest electricity costs in the developed world at $0.33 per kwh, compared with just $0.13 in the US.
At the present retail customer level, that is true:
https://www.reuters.com/article/germany-...SL8N1MZ30X
"The price of power in Europe’s biggest economy is politically contentious as production is cheap but state taxes and fees amount to 56 percent of the final cost."
My comments were focused on the cost of generation rapidly diminishing. The government is adding on to that cost, including to fund the build-out of new distribution networks.
Likewise, the cost of natural gas has plummeted with the advent of fracking technology, but you still have to build and maintain pipelines to get the raw input to downstream markets where it can be used as fuel. The overall LCOE cost is still cheaper than coal, which is why no one is building coal plants anymore. The raw input cost of renewable energy generation appears to be going down at a Moore's Law-ish rate, which affects total cost. Yes, the distribution networks have to be built out, and that is cost/maintenance additive, but those costs do not appear to have dissuaded record domestic U.S. investment in solar/wind (it is competitive, and will continue to be more competitive).
You can't say that renewable power generation is cheap as long as this point from the article remains true: The run-away expansion of wind turbines and solar panels has made German prices the highest in Europe since 2013, not just because of surcharges but because more volatile green power capacity also necessitates new transmission grids and higher costs to manage them.
As I said, the nameplate power costs are cheap, but since you need backup generation for when the wind/sun don't cooperate, the real price is much, much higher.
I understand the bolded, but Germany's retail power pricing issue cannot be divorced from the fact that more than half the retail cost is being driven by state taxes and fees (so, regulatory policy seems to be substantially responsible for the problem). The fact that the cost of solar/wind generation is dropping exponentially is not in any doubt. The build-out rates for new wind and solar projects in places like Texas are a great example of this. The wind/solar boom in Texas is not being driven by bureaucrats. The investment is being made because the technology is profitable, and (in the eyes of investors) a better use of investment capital than other forms of electricity generation. I don't think these underlying market forces are going to diminish just because the German government has made some interesting choices with respect to the regulation of their domestic electricity market.