Study refutes cheap energy from wind and solar

Study refutes cheap energy from wind and solar

The widespread assumption that green electricity would lead to a long-term favorable electricity price due to its low production costs is being questioned by a study of economists. This study shows that the reality may not be as simple as politicians and climate lobbyists portray. Despite the comparatively low cost of producing energy from wind and sunlight, other factors can significantly increase the final price for consumers.

A fundamental error in reasoning manifests itself in the assumption that generation costs alone determine the price of electricity. In addition to these costs, network fees, taxes, duties and levies must also be taken into account, which make up a significant portion of the final bill. The study points out that these additional costs can make supposedly cheap green electricity significantly more expensive.

The discrepancy between the initially low generation costs and the final electricity price is revealed by this research. It is becoming clear that consumers should not only look at production costs to assess the long-term impact on their wallets. Rather, a holistic view of the various price components is required in order to be able to make realistic forecasts about the development of electricity prices.

Given these findings, it is essential that the complexity of pricing is taken into account when discussing the future of the electricity market and the energy transition. A differentiated look at all relevant factors is essential in order to make well-founded decisions and have realistic expectations regarding cost developments in the energy sector.