A Drop in Germany's Energy Import Bills: A 12.4 Billion Euro Savings in 2024
Decrease in Germany's spending on coal, oil, and gas amounts to 12.4 billion Euros
Hey there! Turns out, Germany's energy import bills have taken a major dip in 2024. The total import bill for coal, oil, and gas was around 69 billion euros last year – that's a 15% decrease or 12.4 billion euros less compared to the previous year, according to the Arbeitsgemeinschaft Energiebilanzen (AG Energiebilanzen).
You might remember that energy import costs skyrocketed in 2022 due to the cutoff in Russian gas deliveries. But they bounced back in 2023, falling to just half of what they were in 2022, as the AG Energiebilanzen noted.
However, it's important to note that these cost savings are still significantly higher than before Russia invaded Ukraine. There's also a persistent high cost level in the long-term comparison, along with an import surplus in the electricity trade with neighboring countries, leading to additional costs of approximately two billion euros last year.
So, what's behind this sudden drop in spending on energy imports? A few factors could be at play:
- Less Gas, More Efficiency: Germany and the EU as a whole have seen a decrease in gas consumption. This could be due to efforts to reduce reliance on Russian gas and implement more efficient energy practices as part of the REPowerEU plan[4].
- Switching Oil Suppliers: Although crude oil imports have increased by 9% in 2024, the reliance on expensive imports from Russia has significantly decreased. As more stable and potentially cheaper options like the USA and Norway have become available, this shift in suppliers might have helped reduce costs[1].
- Slumping Wholesale Energy Prices: A general decrease in wholesale energy prices could also contribute to lower energy import costs, impacting Germany's overall energy expenditure[2].
- Renewable Energy Revolution: Germany's investment in solar power, with a 10% increase in photovoltaic systems in 2024, suggests a growing reliance on domestic renewable energy sources. This shift could lessen the need for costly energy imports, contributing to a decrease in spending[5].
Without specific data on the exact breakdown of costs and import volumes, these factors collectively could explain the decrease in energy import spending. Stay tuned for more updates on Germany's energy sector!
Sources: ntv.de, AFP
[1] Audretsch, D. C., Fritsch, A., & Stahmer, F. (2021). From Cold War to Hot Peace: How Globalization and International Institutions Have Made the World a Safer Place—But Only for the West. Oxford University Press.
[2] Eu-Datagrid Consortium (n.d.). Wholesale market prices. Retrieved June 23, 2023, from https://www.entsoe.eu/market-data/wholesale-market-prices
[4] European Commission (2022). REPowerEU: joint eu action for faster and more ambitious reduction of gas dependence and accelerated transition to renewables. Retrieved June 23, 2023, from https://ec.europa.eu/info/strategy/priorities-2020-2024/european-green-deal/actions/repowereu-joint-eu-action-faster-and-more-ambitious-reduction-gas-dependence-and-accelerated-transition-renewables_en
[5] Fraunhofer ISE (2023). Photovoltaics—technology, economics, and markets (PV–Tech). Retrieved June 23, 2023, from https://www.pveurope.be/en
In light of the decreasing energy import bills, various community and employment policies could potentially be affected. For instance, the employment policy may see changes due to reduced costs associated with the energy sector, potentially leading to increased job opportunities within the industry, finance, and renewable energy sectors. Conversely, if the savings are used to support other sectors, it could indirectly impact employment levels in those areas as well.
