This another take on the German energy sector issue. The coal-nuclear situation is discussed earlier in the article.
Germany: Rising Renewables, and Falling Electricity Prices | Climate Denial Crock of the Week
It’s hardly a surprise for the threatened coal industry to claim “many large industrial corporations are migrating out of [Germany].” But for The Economist to make a similar claim, also without a single example, is unusual: Germany’s top energy economist sees no sign of industrial flight, nor has a request for examples elicited any. Yet the canard persists. Perhaps such confusion is due to U.S. expansion of gas-intensive chemical giants like BASF, which naturally pivot toward fourfold-cheaper U.S. natural gas because it’s both a fuel and a feedstock; BASF in Germany also makes 70 percent of its electricity internally from natural gas. But as Craig Morris of Renewables International notes, chemical firms’ U.S. expansions are driven by U.S. gas prices, not German electricity prices. Giant German firms enjoy Germany’s low and falling wholesale electricity prices, getting the benefit of renewables’ near-zero operating cost but exempted from paying for them, as I’ll describe below.
The truth about German industrial electricity prices (such as the wholesale spot and futures market quotations) is easily determined from official statistics, which are far more transparent and thorough than America’s. Even as GE’s Chairman griped that a German steel mill pays four times the typical U.S. industrial power price (perhaps reflecting a confusion between U.S. and Euro cents), the average German wholesale price for June 2013—essentially the price such big industries pay—fell to a record low of 2.8 Euro cents or 3.7 U.S. cents per kWh, well below his 5-cent U.S. benchmark. To be sure, the average retail kWh bought by the entire German industrial sector, much of it small and midsized, cost 8.6 U.S. cents for energy plus 8.0 for taxes, vs. 6.5 cents in the largely tax-free U.S., so smaller firms’ total tariff, typical in Europe, is about twice the U.S. level. But renewables don’t account for that gap; German industry is thriving anyhow because it’s efficient; and U.S. electricity prices rose 4.8 during 2007–12 and 44 percent during 1995–2012—faster than the German increases of 3.7 and 16 percent.
Thus Germany is building the renewable foundation for declining long-term electricity prices. Sure enough, German wholesale power prices have fallen about 30 percent in the past two years to near eight-year lows, putting utilities that underinvested in renewables under severe profit pressure. This success in using modern renewables to reduce and stabilize electric generating costs is sometimes misdescribed as a failure because it creates losers—those who bet against it—as well as the winners who bet on its success.
