German Companies Struggle with High Energy Bills
As Germany makes plans to shut down nuclear energy plants and switch from coal to completely renewable sources, obstacles come not in the form of opposition, but in terms of sky rocketing energy bills that are pushing many Germans into “energy poverty,” and businesses are worried about remaining competitive, the New York Times reports.
Despite the German government’s efforts to shield businesses from the costs so they can remain competitive, the Times quotes a Siemens study that says industrial users in Germany still pay thrice as much as those in the US and far more than those in the UK and France, a fact that has kept many industrial investors out of Germany since 2000.
The high energy bills affect companies differently — with the government’s efforts, one-third of electronics and automotive industry companies have seen their profits rise, while 11 percent of chemical and metal companies have experienced losses.
Aside from the high costs, shifting energy sources on such a wide scale — 80 percent in total — to renewable resources poses a monumental challenge, further compounded by the intermittent nature of solar and wind energy.
In a different take on the situation, Australia’s The Age newspaper carried an opinion piece about how industrial consumers in Germany could help balance demand on the grid. Because of inaccurate weather forecasting for wind and solar energy resources, German grid operators frequently scramble to correct imbalances in the grid, writes Reuters columnist Gerard Wynn, so the German government gave operators leeway to pay heavy users to reduce demand.
Involving energy consumers in balancing the grid is novel, but also complex, Wynn says. There are heavy restrictions on which type of users can play a role, so this limits the pool, which in turn drives bid prices up to 10 times wholesale power prices. The other handicap is that industrial users can survive without power for only short periods of time, and the grid market does not allow for flexibility, Wynn says.
In July, Germany set a world record by producing 23,900 megawatts of electricity in a single day from thousands of solar systems across the country, writes Energy Manager Today guest columnist Kristina Ross. While the number is impressive, she says it’s not likely to hold for long, as new market predictions suggest Germany may soon be surpassed by the US in solar investments.
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