Power tariffs and politics - arguments rage in Germany

Wholesale power prices in Germany are at their lowest in more than three years, undermining the profitability of fossil fuel power generation and trading, and yet 40 million households pay record prices well above European Union averages. To explain this state of affairs, look no further than the expansion of renewable energy installations, which provide bursts of subsidised power often enough to trash market fundamentals. Weather-dependent green energy is given priority on the networks when it is available, securing thousands of private operators healthy earnings while traditional power stations burning coal or gas are reduced to providing reserve power. The state, which supports green power, also benefits from - and exacerbates - high power bills by collecting fees and taxes. Industry analysts say this can only change if government curbs run-away renewable subsidies and taxes and spreads their burden more evenly. "No one expected the rise of solar to be that strong," said Roland Vetter, head of research at financial advisory firm CF Partners in Frankfurt. "(Utilities) RWE and E.ON did not take that into account when they decided to build new power plants a couple of years ago.