It’s the Price of Electricity

Leaving aside the insanity that would have us somehow replace all petrochemical combustion with electricity, electricity is the lifeblood of the consumer economy. Our houses are powered with it, our offices are powered with it, our myriad communication devices are powered with it, etc. Short of a few folks who are truly off the grid (and probably using electricity via wind or solar generation) we don’t really have the luxury of ignoring the impact which electricity has on our society. Lacking energon cubes, we’ve got to make our electricity the old-fashioned way: by turning some other form of energy into electricity.

Given the ubiquity of electricity as the power source which drives most consumer economies, the cost of electricity can have an oversize impact on consumers’ budgets.

Here in the United States, the average price per kWh (for residential/consumer electricity)is about 12.07 cents (for 2021). That’s a slight increase from 2020, when the average was only 10.6 cents. Alaska and Hawaii are outliers with costs being 2 to 3 times what it is for the lower 48. This is understandable because of Hawaii’s isolation and Alaska’s sheer transmission line distances. Still, 10 to 12 cents per kWh is pretty good. In 2000, the average cost was 9.29 per kWh, so allowing for inflation, we’ve actually seen the price of electricity go down in the last 20 years.

Let’s look at how Germany is doing, since it’s been at the vanguard of going green. Watts Up with That has the details:

2021 saw a record price for households: 32.16 euro-cents per kilowatt-hour. It was the sixth year in a row with an increase. Electricity in 2021 costs double what it cost 20 years ago. Much of the price increase over the past two decades are the result of the EEG renewable energies feed-in act.

So, German electricity costs have doubled in 20 years, but US costs have stayed the same. One wonders what drove that?

To make sure we are talking apples and apples here, we’d need to convert euro-cents to US-cents. Doing some rough averaging of monthly euro to dollar conversion costs, the euro would be about 1.18 US dollars for 2021. That would mean we’d take the 32.16 euro-cents and multiply by 1.18 to get the US-cents equivalent: 37.95.

This means that electricity for German consumers is costing roughly 3.5 times what it does for US consumers. Those cost differences would probably also extend to commercial, industrial and transportation electricity costs as well.

That’s a non-trivial difference.

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