EEG Account April Surplus of EUR 263 Million, Current Total EUR 5.06 Billion

April 2015 ended with a monthly surplus of EUR 263 million EUR for the Renewable Surcharge Account (EEG account), leading to a current total of EUR 5.06 billion in the account. Payments by the transmission system operators (TSOs) in support of renewables amounted to EUR 1.85 billion in April 2015, down from EUR 2.15 billion in April 2014.

2015 already started with a surplus of EUR 2.85 billion, which was due to a positive carryover from 2014 (in 2014 and 2013 there were negative carryovers of EUR -225 million and EUR -2.69 billion).

In the first three months of 2015 the account balance rose by more than EUR 600 million per month. In winter there is in particular less solar input so that payments to operators are lower. April 2015 saw a surplus of EUR 263 million, leading to a total of EUR 5.06 billion by the end of the month.

As in the previous years, the surplus can be expected to decrease over the summer months. The calculated statutory target balance (i.e. the planned liquidity reserve) for 30 September 2015 is EUR 2.14 billion. Last year the balance of income and expenses was negative in June (EUR -112 million), July (EUR -515 million) and September (EUR -125 million), yet the total balance remained positive throughout the year, leading to the surplus of EUR 2.85 billion that was carried over to 2015. In 2013, we had negative balances in May ( EUR – 118 million), June (EUR -396), July (EUR -849 million) and August (EUR -540 million), ending on negative balance of EUR -225 million.

Under the Renewable Energy Sources Act (EEG) renewable power input into the German grids is supported by transfer payments such as direct marketing premiums paid in addition to the revenue obtained by the sale of renewable energy that is effected by renewable power plant operator themselves (the general rule, see Section 2 para. 2 EEG) and feed-in tariffs for electricity fed into the grids and sold by the TSOs (in case of smaller plants and special cases, see Sections 37, 38 EEG). The so-called EEG account balances the expenses for renewable transfer payments to renewable power plant operators against the revenue obtained from the sale of renewable energy at the EPEX Spot power exchange by the TSOs and the so-called EEG surcharge, which electricity consumers have to pay in support of the EEG transfer payments.

Pursuant to Section 3 para. 2 AusglMechV (Equalisation Scheme Ordinance) the transmission system operators have to publish the EEG surcharge for the next year on 15 October of a given year. Last year when there was a surplus of EUR 1.38 billion on the EEG account the TSOs announced a surcharge of 6.17 ct/kWh for 2015, a first slight decrease after years of often sharp rises (2014: 6.24 ct/kWh; 2010: 2.047 ct/kWh).

Whether there is room for a further cut of the EEG surcharge for 2016, maybe even a significant cut, seems still too early to say. The energy think tank Agora Energiewende recently published a study on the EEG surcharge, which it said showed

that the EEG surcharge will only remain at the current 6.2 cents per kilowatt hour until 2016. Between 2017 and 2023, it will again rise by 1-2 cents per kilowatt hour, based on the current financing system and constant power market prices. This is due to the relatively expensive build-up in offshore wind facilities. Between 2023 and 2035, the surcharge will decrease by 2-4 cents, adjusted for inflation, and therefore fall below the current level.”

For more information on the study and its assumptions, please see here.

We are not in a position to verify the results, but would like to point out that according to Section 1 para. 2 EEG 2014, renewable energy shall account for 40% to 45% of the share in the gross electricity consumption by 2025 and 55% to 60% by 2035.

Currently market premiums and feed-in tariffs paid under the EEG are higher, sometimes much higher than market prices at the EPEX Spot Exchange. In April the TSOs sold green power for EUR 27/MWh, while the reference value based on which remuneration for example for offshore wind power is calculated was as high as 19.4 ct/kWh (or EUR 194/MWh, cf. Section 50 EEG 2014). The recent PV auction brought an average price of 9.17 ct/kWh (or EUR 91.7 MWh) for the successful bidders, which was higher than the respective current reference value of 9.02 ct/kWh). For 2015, the expected average EEG remuneration (EEG-Vergütung) is 17.2 ct/kWh (EUR 172/MWh), the expected average cost difference between remuneration paid to EEG supported generators and the wholesale electricity market price (EEG-Differenzkosten) is 13.1 ct kWh (EUR 131/MWh).

Even though the EEG remuneration is decreasing with time (cf. Sections 26 to 32 EEG 2014) and the EEG stipulates that as of 2017 the amount of support shall be established in auctions (cf. Section 2 para. 5 EEG), it remains to be seen whether this will bring down EEG costs for consumers in the way predicted by Agora Energiewende. German electricity consumers paid EUR 21.5 billion from the EEG account to producers of renewable energy in 2014, and the first auction for ground-mounted PV capacity did not lead to cost savings.


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