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No negative economic effects of wind tariff
1 March 1998
No perceptible energy price disadvantage is suffered by German industry due to the country's premium payments for electricity under its renewable energy feed in tariff (REFIT), reports the Berlin economic research institute, Deutsches Institut für Wirtschaftsforschung (DIW). Contradicting claims by utilities, DIW says the cost of the REFIT is comparatively small: until now the effect on electricity prices has been less than 0.5%. Other countries have higher payments for renewables it points out. Without going into details, DIW recommends harmonising the price paid for renewable energy throughout the European Union, a reduction in "windfall effects," and a distribution of the cost of the REFIT across the whole of Germany. Today utilities in windy areas largely bear the cost of the REFIT. DIW places the blame for the higher price of industrial electricity in Germany (compared with other European countries) largely on technical and institutional problems, not on payments to renewables. Germany has a higher percentage of underground power cables and "comfortable safety margins in generation and distribution," states the report. Institutional factors include levies and subsidies as well as differing write-off and financing methods. "In France, for example, some of the grid plant is financed by the communes and not directly by electricity consumers," the DIW points out.
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