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Heated Energy Debate In Germany

Germany's third and fourth largest electricity providers, Vattenfall and EnBW, said they were not planning a price raise. The four companies are holding a virtual monopoly.

Kehl Am Rhein, Germany (UPI) Oct 06, 2005
An electrifying battle is brewing in Germany, and that can be taken quite literally: Earlier this week, Germany's two largest energy providers, RWE and E.on, announced they wanted to raise electricity prices by up to 6 percent starting in 2006.

German consumers, already enraged by soaring gasoline and natural gas prices after hurricane Katrina devastated the Southern U.S. coastal states, decided to fight back.

Several consumer protection groups criticized the measure.

"We urge consumers not to pay the higher gas prices, and we are currently examining whether to give a similar recommendation for higher electricity prices," Carel Mohn, spokesman of the German Consumer Protection Association, Thursday told United Press International in a telephone interview.

"We see absolutely no justification to raise prices," he said. "The energy providers are companies that since years are rowing in record profits. If they again raise prices, then that shows that competition isn't working."

RWE and E.on said the raise was necessary because of higher delivery costs, whole sale prices, greater demand and higher expenses from renewable energy sources. Roughly 17 million customers of RWE and E.on are affected, Deutsche Welle said. Renewable energy advocates said RWE and E.on are blaming the wrong party.

"The corporations obviously try to divert from the large profits they made after the last price raise," Milan Nitzschke, head of the German Association of Renewable Energy, said Tuesday in a statement.

E.on and RWE, two of Europe's largest energy providers, brought in profits of more than $10 billion last year. Profit expectations for 2005 are expected to exceed last year's numbers, the companies said in August. E.on last month said it was considering an all-cash offer for the $17-billion-rated U.K. competitor ScottishPower.

Mohn said he believes RWE and E.on are using Germany's "political vacuum," to their advantage. German is entangled in a political deadlock over forming a new government after last month's inconclusive general election. Economy Minister Wolfgang Clement, of the Social Democrats, on Tuesday called on state officials to check carefully whether higher electricity prices are justified.

The inflated prices, which will hit private households as well as businesses, are a further slow-down for Germany's stagnating economy, Mohn said.

"The billions the energy providers are claiming are more than all the proposed cuts in non-wage labor costs that the possible new government can provide," he said. "The industry has confirmed that it's clearly a growth blocker."

Germany's third and fourth largest electricity providers, Vattenfall and EnBW, said they were not planning a price raise. The four companies are holding a virtual monopoly.

In the last 10 years, gasoline costs, prices for conventional heating and electricity of a family-household nearly doubled. That's why leading energy experts, such as Stephan Kohler, head of the federally owned German Energy Agency, advertise an energy-efficient lifestyle.

"In light of rising electricity prices, up to 25 percent of costs can be cut by measures that do not influence your comfort at home," he told UPI Thursday. By simply turning the switch from "stand-by to off" on the household's appliances, a family can save "up to 100 euros ($120)," he said.

More and more Germans, however, are using the historic heating source wood to combat surging prices.

"We've seen the demand for wood heating systems increase sharply," Kohler said. "The pellets which are used to fire those heating systems are cheap because mid-sized businesses produce them with great efficiency."

But why buy the wood if you can have it for free? An increasing number of Germans are seen flocking the woods, reviving a hundred-years-old tradition as they are looking for dead wood to take home and fire the old tiled stove.

Robert Woerner, 48, lives in Durbach, at the foot of the Black Forest, a small town known for its excellent white vines. A few years ago, when a tornado swept the region, Woerner tucked away massive amounts of wood in his barn for use in the winter. The police officer said he chopped the wood into small pieces in long hours.

"We now every day fire our tile stove, which heats the whole house, and use conventional heating only in the bathroom," he told UPI. "It has the same effect but it's much cheaper, and on top it gives the house a nice atmosphere."

Not all countries in Europe are facing such heated energy discussions. Finnish consumers pay roughly half of the German prices. They are held down by an unconventional energy mix of bio mass (with wood garbage from Sweden) and nuclear energy (from domestic plants).

The Finnish energy abundance, however, has not only positive effects. It has led consumers to waste energy and decision-makers to some rather startling decisions: A popular shopping street in Helsinki during winter time is artificially warmed by floor heating. So if you ever want to shop for Christmas gifts barefoot, the Finnish capital might be your place of choice.

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Washington (UPI) Jan 11, 2006
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