No EEG Revision Before Federal Elections in September?

The Chancellery called off this week’s talks with the Länder concerning amendments of the Renewable Energy  Sources Act (EEG) aimed at limiting electricity price costs before the Federal Election in September, several major newspapers reported.

In their latest round of talks on the German energy policy shift in March, Chancellor Merkel and the Prime Ministers of the Länder (federal states) already failed to reach agreement with regard to a joint proposal on measures cutting electricity prices put forward by the Federal Economics and Environment Ministries in February. At the time Mrs Merkel announced that the parties would continue talks and present results in May.

“An agreement before the election (due on 22 September 2013) was not in sight”, the newspaper Süddeutsche Zeitung quoted a spokeswoman to the Chancellery.

The Federal Ministers of Economics and the Environment had proposed to freeze the surcharge paid for renewable energy by German consumers (EEG surcharge) for 2014 to the level payable in 2013, i.e. 5.227 ct/kWh, and thereafter limit the annual increase to 2.5% by cutting EEG feed-in tariffs for renewable power plant owners and EEG surcharge privileges alike (for more information on the increase of the EEG surcharge over the past years, please see here). The opposition had in particular advocated for cuts of the electricity tax and the EEG surcharge privilege for power-intensive companies so as to lower the electricity bills.

If nothing would be done to limit the EEG surcharge, it would “further get out of hand” this autumn (when the EEG surcharge for 2014 is being announced by the transmission system operators), Federal Minister of the Environment Peter Altmaier had warned in March. It now looks as if an agreement on an EEG amendment among the German political parties will not be reached before the election in September. Therefore, a further increase of the EEG surcharge for 2014 is now not unlikely.

If, when and to what extent EU law might force a change of the EEG is a matter of legal discussion. The Commission is in the process of investigating compliance of the EEG feed-in tariff scheme and the EEG surcharge exemptions with EU state-aid and free movement of goods rules. At the same time three middle-sized textile companies have brought lawsuits against the EEG surcharge, which they consider unconstitutional. They have announced to go all the way to the Federal Constitutional Court.

Source: Süddeutsche Zeitung, Frankfurter Allgemeine Zeitung

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