Comment by throwaway473825
2 days ago
The main reason why electricity is expensive in Germany is because it's taxed to oblivion. Even when wholesale prices are negative, electricity costs about three times as much as gas.
Now you might ask why electricity is taxed to oblivion. Some don't like nuclear or coal. Some prefer oil or gas. In the end, there's a majority that wants electricity to be expensive.
I was under the impression that the taxes are going into infrastructure and grants for renewable energies, meaning those energy prices are maybe way higher than advertised. Funny thing is we are constantly being told how cheap reneweables are to produce but apparently there are other costs involved.
FTR and for the inevitable downvoters, I am not a fan of fossil energy. I am merely a fan of well presented arguments, and downvotes aren't that.
Well, that impression is wrong. The german word for "Taxes" is "Steuer". And they go to one of the 3 levels of our government: Federal level, the 16 states, municipalities / communes.
And yes, we pay VAT (19%) and electricty tax (0.0205 € / kWh).
But we also pay other things, like Konzessionsabgabe, KWKG-Umlage, AbN and Offshore-Netzumlage. They have various reasons:
AbN is used to make electricity artificially cheaper for ecenomically important companies that have a high usage of electricity. So this doesn't go to government, it's no tax.
KWKG (Kraft-Wärme-Kopplungs-Gesetz) is payed to keep the oil and gas power plants in operation. We now have so much renewable energy, they it wouldn't be economically feasible to operate them -- they have quite low duty cycles these days. They are however important for the quality of the whole network. So this doesn't go to government, it's no tax.
Konzessionsabgabe could perhaps counted as tax. The lines of the electric grid go over public property. Or they use the area below the pedestrian sidewalks. And so they have to pay for it. So this doesn't go to government, it's no tax, more a rent.
Offshore-Netzumlage is because we have sooooo much electric wind power in the north and baltic sea, but most bigger industry is in the south. It is used to pay for the new electric trasses. So this doesn't go to government, it's no tax.
Also, electric power in Germany is both cheap and expensive. The internal price is often cheap. But the price to end-customers is often expensive. One part of that is that many end-customers don't switch their electricity power. In history, we had local power distributors, often in the hand of the city or the county. But since perhaps 20 years one can now just select anyone, whoever has the lowest price. However, the majority of the germans stay (due to lazyness?) with their local providers. Which are usually on the more costly side.
Source so far: https://strom-report.com/strompreis-zusammensetzung/
Also we should not forget that Germany has one of the best electric grids in Germany. We can take the SAIDI and compare electric grids of regions or countries. And in Europe, Germany has the lowest SAIDI of all large industrial countries. Some have a lower SAIDI, but they are tiny-states.
So, what is SAIDI? The System Average Interuption Duration Index --- or how long per year and customer the power is out. And here we're better than e.g. Austria, France, Belgium, Sweden ... but also MUCH better than the USA, which seem to have exceptional shaggy electric grids.
So price is one thing... but that you can depend on the electric power in Germany, but maybe not abroad, is another thing.
Source for SAIDI: Germany and english language Wikipedia, Bundesnetzagentur
Good to point out the difference between taxes and other tariffs, but I have a hard time understanding why you have to call what I said "wrong"? What you went to explain in detail is exactly what I alluded to, that also matches the previous posters "electricity [...] taxed into oblivion".
Another point: 3.3% of federal tax income, or 1.7% of all taxes paid by citizens, goes directly into "Klima- und Transformationsfonds" i.e. gets pumped into energy transformation. And the state even pumps more money into that, by means of "Sondervermögen" (taking additional debts). Measured as a percentage of federal state tax income, seems like Germany is pumping more than 7% total into energy transformation. Quite a lot I think, and even if this is not directly a tariff on electricity, it's easy to imagine how this can result in general price inflation.