Germany would reportedly be cutting down green energy surcharge on consumer’s electricity bills by 5.7% in 2019. Sources close to the matter informed that apparently, the highest power bills in Europe are paid by Germans, as state-induced fees and taxes constitute nearly 50% of the overall bills.
According to reports, the surcharge under the renewable energy act (EEG), a fee accounting for more than one fifth of energy bills, will be brought down to 6.405 euro cents per kWh next year. The surcharge is currently at 6.792 euro cents, as of this year. Experts believe the savings for households will still be limited since other fees could rise.
German power network operators (TSOs) recently stated that the revenues accumulated to support green electricity are high. The wholesale market prices have also gone up, enabling renewables producers to depend less on subsidies, the TSOs had mentioned.
Reports indicate that around 23 percent of a consumer’s final bill is made up of the EEG fee, pegging it as the biggest spending under the Energiewende policy of Germany aimed at transitioning towards renewables. Estimates show that collections under the EEG in 2018 could amount to more than 25 billion Euros.
The final cost of renewables would depend on prevailing weather conditions which eventually determine how much renewable energy is being produced and is entitled to support under the EEG after it is fed into the grid, the sources further added. The rate of increase in renewable installations like solar panels and wind turbines is also partly reflected by the EEG payouts.
The renewable installations receive above-market state support for making them competitive with conventional power generation, where the output is priced by the wholesale market. Analysts have said that even though reforms to the EEG are gradually reducing the need for subsidies, recently constructed units are still under a rolling 20-year price guarantee which could consistently boost spending over the coming years.