German Conventional Power Loses Ground to Renewable Energy

German Conventional Power Loses Ground to Renewable Energy

North Rhine-Westphalia, the German state which hosts utilities RWE AG and EON SE and has one-third of Germany’s installed conventional power capacity, is losing its status as the country’s powerhouse as wind and solar energy begin to eclipse conventional sources. Last year, the consumers in the western state had to bear the highest renewables surcharges on

North Rhine-Westphalia, the German state which hosts utilities RWE AG and EON SE and has one-third of Germany’s installed conventional power capacity, is losing its status as the country’s powerhouse as wind and solar energy begin to eclipse conventional sources.

Last year, the consumers in the western state had to bear the highest renewables surcharges on the electricity prices at 3.1 billion euros ($3.5 billion), according to the BDEW utility lobby. The biggest recipient was Brandenburg in the east with a positive balance of 838 million euros. This means that North Rhine-Westphalia is injecting more into the development of wind and solar power in Germany than any other state. Electricity consumers in Germany pay a levy, known as the EEG subsidy, through their power bills of 6.17 euro cents a kilowatt-hour to support the development of wind, solar and biomass.

Employment in North Rhine-Westphalia has begun to suffer. RWE, Germany’s largest power generator, slashed the number of employees by 11,000, while EON, Germany’s biggest utility cut 26,000 jobs in the four years through 2014. EON took radical steps in November, announcing it is splitting in two and spinning off fossil-fuel power plants to focus on renewables, to face turmoil in the power sector, hit by a prolonged period of weak energy demand, low wholesale power prices and a surge in renewable energy sources which continue to replace gas-fired and coal-fired power plants.

Germany aims to increase the share of renewable sources to 40-45 percent of total electricity production by 2025, and to 55-60 percent by 2035, while completely eliminating nuclear power by 2022.

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