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Germany

Germany

Preussenelektra piles on the pressure

Wind power in Germany is too expensive compared with the rest of Europe. So claims Preussenelektra, the country's second largest electricity utility, in its campaign against the national Electricity Feed Law. The law mandates that utilities must buy all wind power at DEM 0.17/kWh. Preussenelektra bases its claim on the results of a study comparing market conditions for wind energy in a range of European countries. The study's financial backer is Preussenelektra.

Written by Eugene Cross from the International Institute for Energy Law at Leiden University in Holland, the study reveals that the average rate of payment for wind generated power in Europe lies between DEM 0.098 and DEM 0.108/kWh, says Preussenelektra. What is more, "the resulting financial burdens are carried entirely or in good part by the state," according to the utility.

It points out that Portugal makes direct guaranteed payment, Denmark has tax concessions, while in France wind power is bought by a single monopoly company, which spreads the cost across all customers. In countries like Britain, tendering systems create competition between wind power generators in order to keep the cost to the consumer low, says Preussenelektra.

"Germany is the only European country in which individual energy utilities are forced to pay charges for wind power which are laid down by law," Preussenelektra concludes. Last year the company's reported post-tax profits were DEM 1.859 billion on a turnover of DEM 15.4 billion, achieved mainly from power sales.

Deliberately misleading

From the Bundesverband Windenergie (BWE), Germany's wind association, Andreas Wagner says Preussenelektra's interpretation of the results are "deliberately misleading and in no way correspond to reality." More than half of European Union countries have wind payments mandated by the state; Germany is not alone, he points out.

Furthermore, the study takes no account of the varying wind speeds in the countries compared, nor of varying types of wind installation, financing conditions, planning and operating costs or purchasing parities. Payment for wind in Denmark at about DEM 0.145/kWh is 15% lower than in Germany, but wind speeds are up to 45% better. Also in Denmark the costs of strengthening the grid are paid for by the utilities, while in Germany the turbine operators have to shoulder this cost, he adds.

Wagner also highlights the study's praise of Denmark's environment and energy policy as "a model for the rest of the world," but then questions why it doesn't reach the logical conclusion of recommending the Danish wind payment system -- which bears similarities to the German system. Such an approach would underline the contribution wind energy can make to EU climate protection aims, he says. Instead, a tendering system is recommended, which is supposed to be economically more efficient.

"If tendering is so marvellously efficient, those countries using this system should have the most turbines installed. So where are all their turbines," he scoffs, pointing to the significantly lower installed capacity in Britain, Ireland and France compared with Germany and Denmark. He also points to the lack of private and non-utility operators in these countries, groups which play an important role in the Danish and Germany wind sectors. He warns, too, that tender and quota systems indirectly introduce a ceiling on renewable energies, a ceiling which more rightly should be applied to fossil and nuclear power.

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