Why German energy consumers pay lower bills than US consumers | RenewEconomy

Why German energy consumers pay lower bills than US consumers

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German monthly power bills have fallen. Right now, there is no region of the US where power bills would be lower than in Germany.

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Renewables International

Back in 2013, when everyone was focusing on the price of the Energiewende, I pointed out that Germany would only be the 16th most expensive US state in terms of monthly power bills, primarily because the Germans consume so much less electricity than Americans do. There simply is a difference between prices (which admittedly are relatively high in Germany) and costs (which are prices x units consumed – in other words, the actual power bill).

This month, the BDEW announced (press release in German) that the average German power bill fell from 85 to 84 euros in 2014. Note that this figure is an abstraction, not a true statistical average; specifically, it is based on the abstract assumption of 3,500 kilowatt-hours of electricity consumed over the year. In other words, lower consumption did not reduce power bills in Germany in this calculation.

My calculation from 2013 was based on exchange rates applicable at the time. But the exchange rates have changed considerably since – instead of around 1.30 US dollars per euro, we are now only talking about 1.05 USD. That difference changes the calculation considerably.

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As we see here, there is no region of the US where power bills would be lower than in Germany right now. Granted, almost all of the change is the result of the exchange rate, and electricity is not traded anyway between the US in Germany, so the exchange rate is of limited use. But I used the exchange rate applicable in 2013 back then, so I’m going to use the new one now.

Critics might argue that the main difference otherwise is the far lower consumption in Germany, which is easily less than half as great as any other place in the contiguous 48. Americans, those critics might argue, are thus getting more electricity for their money. They would be right. But people do not want loads of electricity as an end in and of itself. They want to do things with electricity. So if the Germans are happy with their efficient lights and household appliances, they don’t need more electricity.

The biggest difference in consumption, which is clearly visible within the US data, is air-conditioning anyway, which practically does not exist in Germany (where it is simply not needed). All of the US regions labeled “South” have much higher average monthly consumption levels resulting from air-conditioning. A fairer comparison would therefore include heat expenses, which are higher in Germany than in the southern United States. But Germany does not use much electricity for heat, so we would have to include expenses for oil and gas.

For the record (PDF), Germany would have the sixth lowest monthly power rates if it were a US state.

In short, this comparison does not tell the whole story. The main take away is nonetheless important – the reason why the Germans are not up in arms about high electricity prices is because their electricity expenses are relatively low. And as the most recent data show, those expenses remain stable.

Source: Renewables International. Reproduced with permission.

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9 Comments
  1. Geckko 5 years ago

    Are you for real?

    Germany price = 25 cents/Kwh.

    Price in (mainland) US 11-16 cents/Kwh.

    Where exactly did you study mathematics? Where I went to school 25 cents/Kwh is MORE EXPENSIVE than 16 cents/Kwh

    • Giles 5 years ago

      Why don’t you read the story. it points out that german electricity consumers use a lot less electricity. that’s why their bills are smaller.

      • Geckko 5 years ago

        I did read the article. It says:

        “Germany would have the sixth lowest monthly power rates if it were a US state”

        Firstly, “monthly power rates” is an abuse of English. It sounds a bit like it means prices doesn’t it? Dishonest.

        Secondly, what exactly is the author trying to imply when he stated “If Germany was a state in the US”. Well, to be honest, again, if we imagine it being a state in the US then we should imagine it having the same consumption patterns, in which case it would have the highest bills in the US – by a long long way.

        Any way you stack it up, this article is outrageously dishonest.

      • Geckko 5 years ago

        Oh, and let’s be completely honest.

        One reason why German households have low electricity bills isn’t because they have these amazing super efficient fridges and washing machines, but because it is only about 15% of their total energy consumption. in Germany, natural gas and kerosene are major energy sources for heating and hot water.

        And they pay more than Americans for that too!! A lot more.

  2. Geckko 5 years ago

    Me again.

    How about this. If Germany put the price of electric up to €50 per/Kwh, people would stop using it completely. Their electricity bills would go to zero and “their bills” would be the lowest in the world! Success!

    Idiot.

    • onesecond 5 years ago

      Sigh, you are the idiot. Here in Germany people have refrigerators, big flat screens, tablets, smartphones, washing machines etc. like everywhere else. We just use the more efficient ones.

  3. Geckko 5 years ago

    Like any commodity or good, people choose for themselves how much they want to buy. Electricity is no different.

    What is important, especially in the provision of energy is how much it costs. And in Germany it costs astronomically more than in the US.

    This story is garbage.

  4. frostyoz 5 years ago

    The point that you are trying to make is that Germans don’t worry about their very high power prices, because their household consumption of electric power is low.

    Perhaps that is right. In fact, German households consume far more gas and oil than they do electric power. And that household fossil fuel consumption is not caught by the EU emissions scheme. Electric power is only about 18% of their total household energy consumption.

    Take a look at the European Commission’s Energy Efficiency JRC Status Report for 2012. It reports that in 2009 the average German dwelling consumed 1.7 tonnes of oil equivalent energy per annum, which is equivalent to 19,771 kWh of energy.

    The average electric power consumption of 3,500 kWh per household reported in your article is only 18% of that total energy consumption, with the other 82% of energy consumption presumably being primarily the combustion of fossil fuels.

    The US Energy Information Administration reports that the average US household consumed 89.6 mBtu of energy in 2009, equivalent to 26,279 kwh (compared to the German 19,771 kWh), of which 11,320kWh (43%) was electric power.

    So, the average American household drew 43% of its energy from electric power, and the average German household drew only 18% of its energy from electric power.

    So, if German power prices were less, perhaps they would consume more clean electric power, and less fossil fuels?

    • frostyoz 5 years ago

      And what of Australia? According to the ABS series 4670.0, table 4, in 2012 the average annual energy household (dwelling) consumption in Australia is only 9,564kwh (compared to German 19,771kwh and US 26,279kwh). Of this, 67.2% is drawn from electric power.

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