ECONOMIC IMPACT OF ENERGIEWINDE

The wholesale price of electricity fell to minus €100 per megawatt hour (MWh).

Demand was low. Burden of adjustment fell on gas-fired and hard-coal power plants, whose output plummeted to only about 10% of capacity.

At their peak in 2008, the top 20 energy utilities were worth roughly €1 trillion ($1.3 trillion). Now they are worth less than half that

Electricity prices have fallen from over €80 per MWh at peak hours to just €38 per MWh

The sums required to upgrade the grid are huge, as much as €1 trillion in Europe by 2020.

RWE (for example) has fallen from €6.4 billion to €5 billion since 2011, and most analysts expect it to fall to €2.6 billion by 2015.

To make up for lack of investment by utilities, governments will have to persuade others to step in, such as pension funds or sovereign-wealth funds.

Impact on Pr ices and Current Account Deficit/Bal ance

Continued…….

Current Account Balance

Germany’s exports reached a record high in 2014 while imports grew less dynamically, contributing to the increase in the Current Account

Rebalancing in relation to the vulnerable EU countries is occurring as a result of import and export developments

The German current account remains at high levels in the coming years.

In contrast to previous years, a breakdown of excess savings shows that all sectors are now contributing to the current account surplus.

Further breakdown shows that changes in both savings and investment behaviour at the sectorial level are driving aggregate developments.