German Carmakers Rush to Avoid Energy Surcharges

Germany's plan to shift from nuclear power to renewable energy will add as much as €792 million ($1.1 billion) in surcharges to the domestic auto industry's electric bill this year, Bloomberg News reports.

So carmakers and suppliers are switching to their own generation systems including wind power to control costs and add protection from grid blackouts.

Germany's decision to switch from nuclear power to clean-energy alternatives will cost €550 billion ($738 billion), the news service notes. To help pay for the shift, the country has boosted taxes on electricity sixfold since 2006. For big industrial users, the fee this year tops €0.05 (7 cents) per kilowatt-hour 47% more than in 2012.

Bloomberg says the surcharge pushed last year's price of electricity for German industry to more than €0.10 ($1.40) per kilowatt-hour. That was 43% higher than in France and roughly four times the rate in the U.S., where plentiful natural gas has lowered power-generating costs.

VDA, the German auto industry trade group, estimates the country's auto industry buys about 15 billion kilowatt-hours of electricity per year. Analysts say the Germany's southern industrial belt has already lost about 5 gigawatts of capacity because of nuclear plant shutdowns.

Bloomberg says carmakers are responding by installing their own generating capabilities. Volkswagen already produces 63% of the electricity it uses in Germany and may add five more power facilities. BMW is erecting four 2.5-megawatt wind turbines to supply 23% of the power used by its factory in Leipzig. This year Daimler will open a gas-fired plant to supply electricity and heat to its truckmaking facility in Woerth.