European Utilities Productscan: renewable energy tariffs in Germany

Publication Date	August 2006
Publisher	Datamonitor
Product Type	Report
Pages	13
ISBN Number	not applicable
Product Code	DAT00435

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Summary

Introduction

Germany has the highest level of renewable energy tariff penetration in Europe. The German model shows that all companies regardless of size can offer competitive renewable energy tariffs. This brief assesses renewable energy tariffs in the German retail electricity market and highlights key success factors for tariff penetration that can be applied to markets outside of Germany.

Scope

An examination of renewable energy capacity growth in Germany.
A review of renewable energy tariff penetration in three large German cities.
An analysis of the regulatory support system for renewable energy production in Germany.
A summary of German experience that is transferable to other jurisdictions.

Highlights

Including renewable energy tariffs in a product portfolio reduces suppliers' exposure to price volatility in the conventional energy wholesale market. This security can be passed on to customers in the form of price guarantees.

German rules guarantee prices for renewable energy, which stimulates investment in new capacity. These rules also require grid operators to accept energy generated from renewable sources onto their grid. Taken together, a supply-push system is created that feeds into retail sales strategies.

Reasons to Purchase

Understand key features of the most successful renewable energy retail market in Europe.
Understand the drivers behind record renewable energy tariff penetration in Germany.

Content

Catalyst
Summary
Methodology
Analysis
- Leadership in renewable energy capacity translates into retail renewable energy tariff market penetration
- Growth in renewable energy generation encourages distribution and consumption
- Renewables share of primary energy consumption since 1998 has more than doubled with continued growth forecasted
- Dependence on imports, nuclear energy and price volatile fossil fuels drive the development of renewable energies
- Wind energy and hydropower are the two largest contributors to final energy electricity supply
- A cohesive national agenda is integral in promoting renewable energy tariffs
- There are three major domestic advantages in pursuing a renewable energy agenda
- Germany has implemented EU directives with strong national legislation
- Legislation has a minimal effect on the retail price of electricity
- Effects of the EEG on consumer costs
- Residential and business renewable energy tariffs are an important part of the German retail product mix of electrical suppliers
- Residential and business renewable energy tariffs are an important part of the retail product mix of electricity suppliers
- Renewable energy tariffs are a response to market, legal and cultural forces
- An overwhelming majority of household tariffs in Berlin, Hamburg and Munich have renewable energy sources
- An overwhelming majority of business tariffs in Berlin, Hamburg and Munich have renewable energy sources
- Renewable energy tariffs will become a standard in energy suppliers' product portfolios
- All European countries face a high expansion in renewable energy capacity
- Innovation in green based tariffs will increase as renewable energy capacity increases
Appendix
- Definitions
- EEG Renewable Energy Sources Act - Erneuerbare Energien Gesetz
Further reading
- Ask the analyst
- Datamonitor Consultancy
List of Tables
- Table 1: Growth of renewable energy from sources 1995-2005
- Table 2: Residential Tariffs in Berlin, Hamburg and Munich
- Table 3: Business Tariffs in Berlin, Hamburg and Munich
List of Figures
- Figure 1: Growth of renewable fuels in Germany, 1998 to 2006
- Figure 2: Structure of primary energy consumption in Germany, 2005
- Figure 3: Final energy supply from renewable energy sources 2005 - Electricity
- Figure 4: Components of the electricity price (cent /KWh)