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Price and cost are two things. Cost is about the same everywhere. Somebody has to pay for it. The way energy markets work you pay for that indirectly via taxes,
by jillesvangurp 3y ago
Price and cost are two things. Cost is about the same everywhere. Somebody has to pay for it. The way energy markets work you pay for that indirectly via taxes, subsidies, and other incentives. And you pay some of it directly via whatever price the energy has. And some of the cost is offloaded on future generations via loans or simply deferring spending on e.g. nuclear storage, cleaning up oil spills, and dealing with global warming. That trillion dollar IRA in the US is going to have a cost. I'd say it's a good investment though. But it's not free.
There's a reason Danish and German companies currently dominate the exponentially growing market for wind and offshore wind. They have invested wisely into these sectors over the years. The cost for that is indeed reflected out in energy prices. That's not that different from how the US has subsidized in its energy sector via multi trillion dollar wars to secure access to "cheap" oil, lots of government subsidies flowing to oil companies, etc. Just so it can pretend to have cheap energy. And of course as renewable cost drops, those prices can come down too.
At this point a lot of the price is actually just paying for US LNG imports (production of which is subsidized in the US!) and coal imports. Getting rid of that dependence is indeed becoming more urgent for the Germans.
- TheLoafOfBread 3y agoDoes not matter how you want to defend it. German + Danish electricity is on of the most expensive in Europe, despite lot of renewables, which should have made it cheap. And it is especially stupid to defend high prices while you are trying to electrify your a car fleet.