German Renewables Surcharge for 2014 to Increase from 5.277 to 6/6.5 ct/kWh?

The renewables surcharge added to German electricity bills may rise to around 6 to 6.5 ct/kWh in 2014, the newspaper Rheinische Post (RP) reported on Saturday.  The EEG surcharge would then be getting close to twice the average market price in May 2013 of 3.257 ct/kWh for power from renewable sources.

RP referred to energy experts among them Andreas Löschel, head of the expert committee “Energiewende” (energy transformation) set up by the government.

A rise of the EEG surcharge to 6.5 ct/kWh would mean an extra EUR 3 billion on top of the current electricity bills for German consumers, RP pointed out. In October 2013 the transmission system operators (TSOs) will officially announce the EEG surcharge for 2014.

With the renewables surcharge pursuant to the Renewable Energy Sources Act (EEG), the so-called EEG surcharge (EEG Umlage), consumers pay for the difference between the fixed feed-in tariffs paid pursuant to EEG for renewable energy fed into the grids and the sale of the renewable energy at the EEX energy exchange by the TSOs. Due to the costs involved, the EEG feed-in tariff scheme has seen many revisions over the last years, in particular for solar power. Yet the EEG surcharge for consumers has continuously risen.  Last year, it increased by 47% to 5.277 ct/kWh in 2013. A table showing the development of the EEG surcharge can be found here.

At 6 to 6.5 ct/kWh, the EEG surcharge will be up to twice as much as the average sales prices for renewable energy at the EEX electricity exchange in Leipzig. According to information by the TSOs published on 5 June 2013, the average sales prices were EUR 42.11/MWh in January, EUR 43.94/MWh in February, EUR 33.19/MWh in March, EUR 38.90/MWh in April, and EUR 32.57/MWh in May.

In March conservative Federal Minister of the Environment Peter Altmaier had warned that EEG surcharge would “further get out of hand” this autumn when the EEG surcharge for 2014 will be announced by the transmission system operators if nothing would be done to limit the surcharge. In February he and his Liberal colleague Philipp Rösler, the minister of Economics, had proposed an EEG reform that included a freeze of the EEG surcharge for 2014 to the level payable in 2013, i.e. 5.227 ct/kWh, and thereafter a limit of the annual increase to 2.5%. However, the government and the Länder (federal states), many of which are ruled by opposition parties, failed to reach an agreement.

Hence the matter has been postponed until after the Federal Election on 22 September 2013. Meanwhile Chancellor Angela Merkel has outlined key aspects of a reform of the EEG that she urgently wants to address after the election.

If, when and to what extent EU law might (also) force a change of the EEG remains to be seen. 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 (for the latest developments, please see here).

Warnings that rising electricity costs might endanger acceptance of Germany’s 2010/2011 energy policy shift towards a mainly renewable energy supply have come from various sources, including the IEA.

Source: RP-Online

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