NCPA - National Center for Policy Analysis

German Energy Policy Drives Up Electricity Prices

December 2, 2014

Less than 25 percent of German energy comes from green energy sources, yet the country aims to have that figure at 80 percent by 2050. Already, German energy is wildly expensive due to its relatively high reliance on wind and solar power, explains Jared Meyer of Economics21.

German household energy bills are 50 percent higher than the rest of the European Union. Why? Because wind and solar power are unreliable. Both sources require the wind to be blowing or the sun to be shining in order to generate power; when the wind does not blow, the power grid has to ramp up energy production from other sources to meet demand. This process -- called "cycling -- is inefficient, wasting energy and raising costs.

Indeed, the United States only gets a small portion of its energy from wind and solar sources -- a function, says Meyer, of the inordinate costs associated with green power:

  • In 2019, wind power will cost between $64 and $175 per megawatt.
  • Solar power will cost between $155 and $195 per megawatt.

By comparison, natural gas plants produce energy that costs just $14 per megawatt.


Source: Jared Meyer, "America Should Avoid Germany\'s Failed Energy Policy," Economics21, December 1, 2014.   

 

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