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What exactly is meant by 'gross electricity consumption'?

‘Gross’ and ‘net’ are terms that many are familiar with when it comes to money. But what is meant by these terms in the context of the energy transition?

It's all about measuring our country's power consumption

We've made it: for the first time last year, renewables such as wind and solar energy accounted for nearly a third of Germany's electricity consumption – which makes them our number-one source of electricity. To be more precise, the share that renewables had in Germany's 'gross electricity consumption' in 2015 is estimated at almost 33 per cent. This 'gross electricity consumption' also plays an important role in the Federal Government's energy policy. One of the most important targets established by the government is for the share of renewables in Germany's gross electricity consumption to increase to up to 45 per cent by 2025. But why 'gross electricity consumption' rather than 'electricity consumption'?

Losses and self-supply are included

Actually, it's not that complicated. A country's gross electricity consumption is defined as the entirety of the electricity that is used in a country. It's called 'gross' electricity consumption because it includes electricity that gets lost on the way and never makes it to the end user. Some of the electricity flowing through the grid will end up heating the power lines (grid losses). A certain amount of electricity generated by power stations will be needed for these to be able to operate. Similarly, pump-storage facilities operate on the principle that some of the electricity is used for pumping the water. Once you deduct these losses (grid losses and electricity that is used by power plants themselves), you obtain what is called a country's 'net electricity consumption' or 'final energy consumption'.

Does 'used in Germany' mean 'produced in Germany'?

At the same time, it is important to bear in mind that not all of the electricity used in Germany is necessarily generated in Germany. In 2014, for instance, we imported electricity from Austria and several other countries. In turn, Germany also supplies other countries with electricity, for instance when there is so much wind in our coastal areas that we ourselves can neither use up nor store all of the wind power harnessed in Germany. And that's the way it should be. This type of cross-border trade in electricity helps bring down the overall cost of the electricity system.

For our definition this means that, strictly speaking, a country's gross electricity consumption is the totality of the electricity generated in this country, plus electricity imports, minus electricity exports. It's about all of the electricity used in Germany – irrespective of where it comes from.