Denmark and Germany have the highest household electricity prices in the OECD. France and Finland have prices that are in the lower 17 of the OECD’s 34 countries. It wasn’t always that way. As you can see in the chart and table below—both based on recently published OECD data—Denmark, Germany, and France had very similar prices up to about 1990 (Finland’s prices were cheaper than France’s up to about 2008). But after 1990, and especially after 2000, very significant differences emerged. As you can see, Danish and German electricity prices skyrocketed after 2000; French and Finn prices rose only slightly. (I give the actual figures on which the chart is based in a table at the bottom of this article.)
There are very good reasons for these price differences, and they have everything to do with these countries’ different responses to the phenomenon of anthropogenic climate change.
So: why the big price differences, and especially after 2000? Denmark and Germany, reflecting the fashion of the time in environmental policy advocacy, put huge amounts of wind and solar into their systems. Both wind and solar are unreliable, and owners of generators using wind and solar therefore require high prices just to keep from going out of business. The only way to give wind and solar owners those high prices is to force rate payers to pay them, which is what happened in Denmark and Germany.
France stayed more or less put: France, by conscious choice, went nuclear in a big way during the 1970s. It got more than 75 percent of its power in 2012 from nuclear (Electricity Information 2013, p. IV.305), and is today the second biggest electricity exporter in the EU; Germany is the biggest (p. III.24).
Finland did not bother with much wind and solar. It gets most of its power from a mix of the usual three sources: combustible fuels (29.8 billion kWh, or 42.3 percent of the total), nuclear (23 billion, or 32.6 percent), and hydro (16.8 billion, or 23.8 percent). See Electricity Information 2013, p. IV.287.
France by any standard has a very clean power system. Finland has a relatively clean one. Both Denmark and Germany are dirty by comparison with either France or Finland. Have a look at the chart to the right; it gives the carbon intensity per kilowatt-hour (CIPK) of each of these countries since 1990. Figures are from “IEA Statistics: CO2 Emissions from Fuel Combustion, 2012”, p. 111.”
[stextbox id=”info” caption=”What is the CIPK, and how is it calculated?”]CIPK stands for CO2 Intensity Per Kilowatt-hour. It is a measure of the carbon content of a kilowatt hour of grid electricity.
The CIPK of a given grid is simply the amount of CO2 emitted by the generating plants that feed the grid with electricity, divided by the total amount of electricity fed, over a given hour. Of course, you have to know both of these figures.
Here is how to calculate Ontario’s grid CIPK. You need to refer to Table 1, in the upper left-hand sidebar on this page. Table 1 gives the current Ontario grid generation mix, and the CO2 emissions associated with the emitting fuel types.
- Go to the Total row in Table 1.
- Take the figure from the CO2, tons column.
- While still in the Total row, now take the figure in the MWh column.
- Divide the CO2, tons figure by the MWh figure.
- Multiply that result by 1,000. This converts tons-per-megawatt-hour into grams per kilowatt-hour.
The upshot is, Frenchmen/Frenchwomen and Finns get clean power at cheap rates. Danes and Germans pay through the nose for dirty power.
Who got the good deal? And which countries should be followed as examples?
Here is the same OECD household price data on which the first chart is based:
Household electricity prices, U.S. $ per MWh