Eastern Germany More Affected by Rising Electricity Costs – Household Electricity Prices Rising to 40 ct/kWh by 2020?

Due its higher than average electricity production from renewable energy sources, Eastern Germany benefits in the area of employment, but its citizens have to bear higher than average grid costs. Having a generally lower income than their peers in former West Germany, the citizens of the five German states that formerly constituted East Germany are also harder hit by the rapidly rising electricity costs in the wake of Germany’s energy transition (Energiewende). These are the mains conclusions of a study on the effects of the Energiewende on the five Eastern German states, presented by the federal government’s Commissioner for Eastern German Affairs, parliamentary state secretary Dr. Christoph Bergner. Electricity prices for private households in all of Germany will rise from currently below 29 ct/kWh to almost 40 ct/kWh by 2020, the study also predicts.

The study was prepared by EuPD Research and DCTI Deutsches CleanTech Institut.

According to the study, renewable energy production accounts for 29% of the gross electricity production in Eastern Germany, compared with about 20% in Western Germany. Wind energy is the dominant source, followed by biomass. The five states are net exporters of electricity, exporting roughly 34 TWh and will continue to do so, the study says. It predicts an increase of the share of renewables to 49% by 2020. The fluctuating renewable energy production not only leads to high exports, but also makes grid balancing measures necessary. As the resulting grid costs are charged regionally, Eastern German grid costs are on average 1 ct/kWh higher than in the rest of Germany.

Compared with 2004 electricity prices for private households are expected to more than double to almost 40 ct/kWh by 2020, the study predicts, adding that duties, tax and surcharges will rise to 55% (from currently 50%). This will have a greater effect on Eastern Germany with its lower than average income level than the rest of the Germany, the study says.

The authors also point out the various consequences of the growth of renewables on the need for grid expansion and storage possibilities. Dr. Bergner said an intelligent mix of renewable and conventional energy sources was needed, not always new renewable growth records. East German lignite had to be seen in this context, given its ability to provide base load energy. Besides lignite was very important for the chemicals industry in Central Germany.

Source: Federal Ministry of the Interior

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