Alternative energy in Germany may be a costly endeavor

Alternative energy in Germany may be a costly endeavor

September 13, 2012 0 By Stephen Vagus

Alternative Energy in Germany

Germany’s alternative energy plans may be more expensive than originally thought

Alternative energy has become a popular concept in Germany, but there is an ongoing debate concerning the ultimate cost of switching over to renewable power. Germany has embarked on a campaign to overhaul its energy system, establishing an infrastructure that is more accommodating to alternative energy and sustainability. While alternative energy has managed to garner a significant amount of acclaim for its economic potential, some hold that clean forms of power are actually more expensive than people are willing to admit.

EEG law will allow energy companies to establish a surcharge that will boost their profits

In November of this year, four of German’s largest energy companies will determine a surcharge that will be associated with the country’s Renewable Energy Act (EEG). This surcharge is meant to account for the cost of all feed-in tariffs that were used to benefit various alternative energy systems. The surcharge will not include the price of electricity that was sold on the national power exchange. According to one of Germany’s largest energy firms, Vattenfall, consumers can expect to see a 50% increase on their energy bills next year.

Company notes that consumers may see higher energy prices in the coming years

Vattenfall estimates that consumers could be paying an additional $60 billion on energy by 2020. Meanwhile, Germany’s energy companies are expected to see profits shoot up. According to an analysis done by Germany’s Network Agency, a regulator of the country’s gas networks and energy grid, energy firms saw their profit margin grow from 1.1% to 8.2% since 2007. The agency suggests that this is partly due to the fact that the EEG law allowed energy companies to pass on the costs associated with alternative energy to consumers.

Campaign launched to reform EEG

Germany has become a leading force in the alternative energy sector and many companies tout the economic potential clean energy systems and technologies bring. These benefits have only been seen in some cases, however, and it seems that alternative energy could be having a more profound financial impact that some had originally anticipated. There is currently a campaign aimed at bringing reforms to the EEG law that would help offset the costs associated with incorporating alternative energy.