Energy ministry wants to phase out Germany's renewables levy as of 2022

Germany’s government is inching closer to scrapping the renewables surcharge on peoples’ power bills, by taking the funding for renewable electricity production from the state budget instead, writes Steven Hanke in Tagesspiegel Background. Federal energy minister Peter Altmaier (CDU) had initially said that the renewables surcharge (also known as EEG-levy) should be abandoned step-by-step in the next five years and that the future government after the September elections should decide on this. But now the energy ministry is working on a proposal to completely abolish the EEG-levy in the medium term and finance it through the budget, Hanke reports. As of 2022, all new renewable installations could be funded via the state budget, which would be necessary to stabilise electricity prices in the long term and make progress in the integration of other power-hungry technologies, such as electric cars and hydrogen, according to the proposal. The CDU’s coalition partner SPD will likely be open to such a change, Hanke writes, since they had wanted to answer the “key question of financing” as part of the last amendment of the EEG.

The 2021 version of the Renewable Energy Act (EEG), the law that initiated the payment of feed-in tariffs to renewable producers which are partially paid for by the EEG-levy on the power bill (EEG-Umlage), marks 2027 as the year when the government wants to propose how and by when renewables funding via the EEG could be stopped entirely. To alleviate the financial burden on power consumers, who as of January 2021 also pay a CO2 price on heating and transport fuels, the EEG surcharge was capped to 6.5 cents this year and 6 cents next year by refinancing it from the federal budget.