Fact Check


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Several recent press articles, including one in the New York Times, have misrepresented the consumer and environmental benefits wind energy is producing in Germany. These articles have misleadingly looked at small snapshots in time that miss the large consumer savings and pollution reductions wind energy is producing in Germany. Moreover, wind energy’s benefits for consumers and the environment are even larger in the U.S., where wind resources are typically 50% more productive than those in Germany.

Consumer benefits in Germany

In Germany, wind energy affects two parts of a consumer’s electric bill, increasing one but decreasing the other. The New York Times and other articles have only focused on increases in a small component of German electric bills, the renewable energy surcharge, while ignoring how wind energy is drastically driving down costs for the component that makes up a much larger share of the total electric bill, the actual cost of electricity. This is essentially doing a cost-benefit analysis and not looking at the benefit side of the ledger book.

Germany has already seen a 20% drop in wholesale electricity prices over the last year, in large part because wind and solar energy displace more expensive sources of energy. Grid operators use an electricity market to select which power plants should run, picking the plants that have the lowest cost of producing electricity first and then using more expensive sources until they have purchased enough supply to meet electricity demand. Wind and solar enter the market as the lowest cost resources because their cost of producing an additional amount of electricity is nearly zero, given their lack of fuel costs. As a result, grid operators use renewable output first and use it to replace the sources of energy that have the highest fuel costs, which are usually the least efficient fossil-fired power plants. This produces massive benefits for consumers and the environment.














Unfortunately, German electricity customers are only beginning to see these savings because of the year or two regulatory lag in updating retail electricity rates to account for changes in wholesale prices. In addition, the renewable costs appear larger than they are because Germany does not charge large industries the renewable surcharge, forcing smaller customers to bear nearly all of this cost while German industry receives the cost-reducing benefits of renewable energy without bearing the costs. Finally, wind energy’s impact of driving down electricity prices has actually had the perverse effect of making the cost of the surcharge misleadingly appear larger than it is, because what counts as the surcharge is calculated based on the difference between a fixed Feed-In Tariff amount and the wholesale electricity prices that wind and solar are drastically driving downward. As a hypothetical example, if the feed-in tariff for wind energy were fixed at 6 cents/kwh, and renewable energy drove the wholesale price of electricity down from 5 cents/kwh to 4 cents/kwh, the renewable surcharge would appear to have doubled from 1 cent/kWh to 2 cents/kWh, even though the actual cost to society remained roughly the same.

Germany is making a prudent long-term investment to reduce its dependence on expensive and volatilely priced fossil fuels, particularly natural gas that is imported from Russia. Like energy efficiency upgrades or any smart investment, to reap long-term returns it is necessary to make an investment that has up-front costs. This effort enjoys very wide support among the German people, despite the efforts of the New York Times and others to paint it in shades of doom and gloom.

Pollution reductions in Germany

The New York Times article’s discussion of carbon emission trends in Germany falls into the same error of only taking a small snapshot of time, but is even more misleading. The New York Times focuses on the fact that carbon emissions ticked up slightly in 2011, with the context strongly implying that renewables were somehow to blame for that increase.

Of course, 2011 was the year in which Germany abruptly shut down a significant share of its nuclear generating fleet following the events at Japan’s Fukushima nuclear plant. To anyone taking an objective look at the data, the most noteworthy fact is that Germany’s emissions didn’t increase more after the country had to replace nuclear’s zero emission electricity with other sources (plus other factors causing emissions to increase, such as a shift from gas to coal driven by a spike in natural gas prices, as well as an increase in electricity exports). As the data indicate, you can thank wind and solar energy for making would have been a massive spike in emissions into a minor blip.






Table 1: Percent Change in Electric Sector CO2 Emissions/kWh from 1999-2010


% Change in CO2 emissions/kWh from 1999-2010

Increase in wind’s electricity percentage share from 1999 to 2010
















All OECD Europe




Interestingly, Germany would likely have seen a much larger decline in emissions intensity had the country not decreased its use of zero-emission nuclear energy by 16% over the 1999-2010 period.


Consumer benefits and pollution reductions in the U.S.

Wind energy’s benefits for consumers and the environment are even larger in the U.S., where wind resources are typically 50% more productive than those in Germany. The U.S. wind energy fleet is currently reducing carbon emissions by nearly 100 million tons per year, the equivalent of taking 17.5 million cars off the road.


At least 74 U.S. utilities bought or owned wind power in 2012, up 50% from a year ago. Southern Company recently made its third wind energy purchase, explaining that wind energy reduces its customers’ electric bills. Similarly, Oklahoma Gas and Electric estimates that a single wind project will save Arkansas customers $46 million. In July, Xcel Energy announced that a single wind purchase will save its customers $590 million in fuel costs, noting that “We are making these acquisitions purely on economics and the savings we can deliver to our customers.”

Synapse Energy Economics recently released a report that indicates doubling the use of wind energy in the Mid-Atlantic and Great Lakes states beyond existing standards would save consumers a net $6.9 billion per year, after accounting for the cost of wind and transmission. The study found that this amount of wind would reduce the region’s carbon dioxide emissions by 14%, or 50 million tons per year. Similarly, the New England grid operator calculated that obtaining 20% of the region’s electricity from wind would reduce electricity prices by more than 10%, while also reducing carbon dioxide emission by 25%.



Ranking for wind power

Electricity price increase, 2005-2010

Bottom 30 wind power states


Top 20 wind power states


Top 10 wind power states



As we and others have noted, fossil fuel industry groups in the U.S. and Europe have been propagating myths about Germany’s experience with renewable energy. It is unfortunate that these myths have now made their way into respectable publications without any critical analysis or regard for what is actually happening in the U.S. and Europe. An objective look at the data clearly shows that wind energy is win-win for consumers and the environment.

Photo credit: David K. Clarke

Related articles on utility integration – cost:

Wind research generates savings for large utility, November 14, 2011
Inexpensive and predictable, January 26, 2010


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