Energy costs for German industry fall sharply since 2010

Renewables International

Öko-Institut and DWI have produced a new cost indicator for industry. The researchers find that German industry bills are down by 10 percent relative to 2010, the year before Chancellor Merkel’s nuclear phaseout.

To be fair, one of the main effects only began in mid-2015, when the price of fossil fuels began to drop on global markets. And in the cost index below, the precipitous drop in 2010 is also the result of dramatically plummeting fossil fuel prices in the wake of the financial crisis.

The index is thus 21 percent below the base level in mid-2010. Monthly energy costs in a six-month average came in at 2.72 billion euros in Q1 2016, 280 million euros less than in 2010, equivalent to a 10 percent reduction.

As is necessary, the study divides industry into different categories (in this case, three) according to the amount of energy consumed. Not surprisingly, energy-intensive industry is faring quite well at the moment, with the cost index at just under 67 points – a 23 percent reduction.

The study is available in German (with an executive summary in English) as a PDF. At 44 pages, it is quite short and mainly concerns methodology. Industry in Germany devotes roughly half of its expenditures on electricity alone, followed by just over a third on gas and petroleum products. Direct purchases of coal and other energy sources collectively only make up 13 percent.

It’s important to keep those relations in mind when they talk about the cost impact of the Energiewende on industry prices. The cost of renewables only affects electricity, which itself is only half of the picture.

This article was originally published on Renewables International. Re-produced with permission.