Residents and small companies in Germany make their own power

Klaus Meier lists three reasons for generating his own electricity in his family hotel in Germany's southern city of Freiburg - "cost savings, energy efficiency, climate protection".

Like a growing number of German small businesses, homeowners, schools, hospitals and industrial plants, Meier has opted for energy self-sufficiency.

Of the about 600 terawatt hours Germany consumes each year, 50 TWh are self-produced - about eight percent of the total - in a trend that has seen solar panels installed on home roofs and gas plants set up in factories.

In industry, the share is around 20 percent, according to business and energy consumers groups. Their main goal: cost savings.

Homemade power in Germany, which has some of the highest electricity bills in Europe, is not taxed, unlike conventional electricity where one-third of the customer's bill goes into the public coffers.

And neither are the do-it-yourselfers subject to the duties used to subsidize the country's wider "energy transition" toward clean energy.

Ten years ago, Meier fitted his four-star hotel, the 45-room Park Hotel Post, set in a 19th century building, with a gas-fuelled power-and-heat cogeneration unit.

It cost him nearly 50,000 euros ($68,000), but Meier said, "the investment paid for itself even faster than I had expected".

Big business

It's a trend adopted long ago by German big business, which values the self-sufficiency and lower cost.

"If the power we produce ourselves in Ludwigshafen was taxed, it would cost half a million euros," said Kurt Bock, head of chemical giant BASF, which runs three gas power plants on its site in southwestern Germany.

Automaker Daimler has invested over 40 million euros in a new gas turbine for its plant in Sindelfingen, its largest production site. The investment will allow it to increase its power output there by 44 percent.

"This reduces our dependence on external suppliers and allows us to increase security of supply and predictability of our costs," plant manager Willi Reiss said.

According to a survey of 2,400 companies conducted last year by the German Chamber of Commerce, nearly half have either made, initiated or are planning measures to provide themselves with electricity.

Besides the financial argument, security of supply is an oft-cited reason.

Renewables such as wind and solar represent an ever increasing share of German electricity production, but the output is fickle, depending on weather conditions.

Although the lights haven't gone out yet in Germany despite the most dire warnings, the grid is becoming less stable.

'Decentralization'

The "self-producers" are helping decentralize power production - a key aspect of Germany's ambitious energy transition, which was accelerated with a decision to shutter nuclear plants after Japan's 2011 Fukushima disaster.

For traditional power companies, they represent competition but also offer an opportunity "to become a service provider" by passing on advice and technical solutions, said Thomas Kusterer, chief financial officer of Germany's third biggest energy company, EnBW.

Not everyone likes the trend of power-users going off the grid.

"I understand those who do it, as long as the laws are as they are," said Hildegard Mueller of BDEW, the German Association of Energy and Water Industries, which represents producers' interests and calls for fewer incentives for self-production.

But she said that self-producers "are detached from the community, leaving it to others to bear the costs of the energy transition".

Agence France-Presse