Delay Publication of White Paper on Electricity Market Design / Update Climate Levy Project

According to an answer to a minor interpellation by Green Party member and energy expert Oliver Krischer, the government is now planning to present the White Paper with specific proposals for the future energy market in Germany “in June or July”. Besides the answer contains information as to the increase of electricity costs for consumers if a climate levy for conventional power plants is introduced as the government plans.

1. From Green Paper to White Paper

In view of the challenge to secure supply caused by a growing amount of intermittent renewable energy that is supported under the Renewable Energy Sources Act (EEG), the government presented a Green Paper in October 2014. It looked into two basic approaches: an optimised electricity market (“electricity market 2.0″) and a further market alongside the electricity market to maintain reserve capacity (“capacity market”). Comments were due on 1 March 2015.

At the time the Federal Ministry for Economic Affairs and Energy announced to present a White Paper with specific proposals at the end of May 2015.

2. Climate Levy

As previously reported, to reach the government’s goal of reducing greenhouse gas emissions by 40% by 2020, the government adopted its “Action Programme on Climate Protection 2020″ (Climate Programme 2020) in December 2014. The measures proposed included the obligation of the German power fleet to reduce an extra 22 million tonnes of CO2 by 2020.

In March 2015 a key point paper was presented that outlined how the reduction should be implemented. It was met with strong opposition as it affected mainly older coal-fired power plants and there were strong legal concerns about the way the government wanted to proceed concerning not only German, but also European law (for more information, please see here).

In May 2015 the government proposed to reduce the burden for conventional power plant owners to extra CO2 savings of 16 million tonnes by 2020. Yet there was still opposition and the legal concerns also remained.

In his minor interpellation Mr Krischer enquired with regard to the costs of the climate levy in the original and the reduced form for consumers as well as the costs of an alternative proposal by the trade union IG-BCE featured in the newspaper Süddeutsche Zeitung. According Süddeutsche, IG BCE proposed that a number of old an inefficient coal-fired plants be selected in a tender. They should form a capacity reserve and be decommissioned after four years.

The government reiterated that according to an expert opinion its original proposal would result in higher costs for consumers of 0.2 ct/kWh. Regarding the IG BCE proposal, which it called “a technology-open capacity reserve”, the government said it was not comparable. It added that it would lead to a different amount of CO2 savings and different costs and said the effects of the proposal were being examined.

Source: Bundestag (please search document for “Weißbuch”)

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