* Renewable subsidies have caused German solar power glut
* Low German wholesale prices make it attractive for exports
* German households foot the bill for cheap exports
By Vera Eckert and Henning Gloystein
FRANKFURT/LONDON, April 15 Germany's neighbours
enjoy cheap imported power subsidised by Berlin's green energy
policy and paid for by German households, analysts say.
Generous subsidies have boosted renewable electricity
generation, and created a German green power glut. But Germans
themselves do not see lower prices, which are restricted to the
wholesale market - in fact the opposite. Instead it is their
neighbours whose bills benefit thanks to cheap imports from
International Energy Agency data for 2012 put household
electricity in Germany at $352 a megawatt hour, Dutch
electricity at $238, Switzerland at $222 and France at $187.
When Chancellor Angela Merkel's government accelerated the
nuclear exit in 2011 and set the country on a course to switch
to renewable energy, some experts warned that there would be
power shortages as a result.
But power trade statistics from the biggest electricity
market in Europe not only dispel this notion, they also show
that German households subsidise power supplies elsewhere.
"The Germans have taken on a disproportionate share of the
high cost of renewables via the support payments," said Kornelis
Blok, director of science at Dutch consultancy Ecofys.
"These leave a burden on the household price. So who is in
fact paying for cheap Dutch power? It is the Germans."
Despite its nuclear exit, Germany remained a large exporter
of electricity in 2012, especially to the Central West Europe
(CWE) market region of France, Benelux and Germany and into the
Alpine states of Switzerland and Austria.
Germany exported 67.3 billion kilowatt hours (kWh) of power
last year compared with 42.8 billion kWh of imports, data issued
by the federal statistics office and the industry statistics
group AGEB show, although they say that this includes transits
and non-commercially traded volumes arising from grid balancing.
Wholesale power prices in Europe's biggest economy have
dropped by over 32 percent in the past two years, pulled down
largely by a flood of subsidised new solar power generation that
has not been equalled in neighbouring markets.
German solar power producers added 31 percent more capacity
in 2012 to arrive at 32.4 gigawatt of capacity at the end of the
"German power prices have decoupled from other central
European markets, such as France, the Netherlands or Belgium,
likely on the back of strong growth in solar capacity," Bank of
America Merrill Lynch said in a research note.
The equivalent French price has dropped around 27 percent,
while Dutch prices are down less than 20 percent, according to
Reuters data (see chart).
GERMAN HOUSEHOLDS BILLS RISE
Germany's cheap wholesale power prices make them attractive
for exports. The German export figure is equivalent to what
eight conventional power plants generate in a year.
The Netherlands were the biggest recipient of German
electricity, with 22.6 billion kWh (2.5 power stations),
followed by Austria's 15.1 billion kWh (2 power stations), and
Switzerland's 12.7 billion kWh which equate to the annual output
of 1.5 large power stations.
The rest of German electricity exports largely went to
France, which also supplied large amounts of power back to
German retail power customers have already seen their bills
rise by over 12 percent since the beginning of the year, with
the share of renewable subsidies and other state charges in
their total bill now at 50 percent.
Merrill says that the trend of decoupled and lower German
prices is not seen coming to an end as it expects more renewable
capacity to be added to the system until the laws are changed.
"We see a possibility of further decoupling," the bank said.
($1 = 0.7635 euros)
(Editing by William Hardy)