The levy German power consumers pay on their electricity bills to finance the build-up of renewables (EEG surcharge) next year will jump by 8.3% to €0.0688 ($0.0758) per kilowatt hour of electricity consumed, re-igniting a heated debate on the cost of the country’s energy transition.
The hike is necessary to finance the rising costs of the Energiewende – Germany’s transition from nuclear to renewable power – which according to calculations by the country’s four transmission system operators (TSO’s) next year alone will reach €23.98bn.
The TSO’s in a joint release say the expected output from renewables next year will rise by close to 11 terawatt hours to some 187 TWh, pushed higher mostly by onshore and offshore wind power. Onshore wind will be responsible for €0.015/kWh of the EEG surcharge, while offshore is to account for €0.009/kWh.
PV due to too high FIT’s granted in past years still makes up the bulk of the surcharge with €0.026/kWh, while consumers have to pay €0.018/kWh to foster electricity from biomass.
But the TSO’s also explain that a great part of the rise in the EEG levy is caused by a continuously sinking wholesale electricity price.
Paradoxically, the surcharge rises when wholesale prices fall, as the levy makes up for the differences in support payments to RE producers and the amount they get on the electricity exchange.
“The repeated rise of the EEG surcharge makes the continued pressure to reform the renewables support clear,” says Stefan Kapferer, head of the BDEW, the main lobbying group for Germany’s energy sector that mostly represents big utilities.
“With the EEG reform 2017, an important step has been made: in the future, support via tenders will lead to a more cost efficient build-up of renewable energies,” he said, adding that in the long-term the Renewable Energies Act (EEG) must develop further in a market-oriented direction.
Most of the renewables sector, NGO’s and Greens reject that line of argument, blaming the dysfunctional wholesale market with too low prices for fossil-fired power for the elevated EEG surcharge.
“Fallen wholesale prices should be passed on to power consumers,” says Hermann Falk, managing director of Germany’s renewable energy federation BEE.
The BEE also blames the more than €5bn in exemptions from the payment of the EEG surcharge for heavy industries for the elevated levy and suggests financing those “industry privileges” directly from Germany’s federal budget instead of via the EEG account.
Environmental group Greenpeace blames the failure of energy minister Sigmar Gabriel to shut down redundant and polluting coal-fired power plants for a surplus in electricity on wholesale markets that is depressing the price level and thus indirectly pushing up the EEG surcharge.
“Germany’s delayed coal exit is a burden not only to the German climate footprint, but via the EEG surcharge also for households,” Greenpeace energy expert Niklas Schinerl says.
The damaging cost discussion in great part has contributed to Berlin’s efforts to push down the cost of the renewables expansion by moving Germany's support system to one mainly based on tenders, as opposed to feed-in tariffs (FITs).
Politicians of the opposition Free Democrats, a liberal party, and the right-wind populist Alternative for Germany (AfD) party now are demanding to scrap the EEG altogether, representing a first full-front attack on Germany’s Energiewende that until recently enjoyed unanimous support.