German treasury on board with plans to abolish renewables levy early

Germany’s three-party government coalition is pressing ahead with plans to quickly end the support to renewable energy operators directly via consumers’ power bills to help households in times of rising energy costs. "If the coalition agrees, then I would make it financially possible for the renewables levy to be eliminated in the middle of the year," finance minister Christian Lindner (FDP) said in an interview with news magazine Der Spiegel, signalling that an end to the renewables surcharge could come earlier than planned. "That would be a billion-dollar relief for families, pensioners, recipients of student support or basic security, and medium-sized businesses and trades," Lindner said. Both climate minister Robert Habeck (Green Party) and the Social Democrats’ (SPD) parliamentary group had proposed an earlier end to the levy that is to be abolished as of January 2023. Support to renewable energy operators will then be subsidised through the federal budget, saving an average household about 300 euros per year.

However, Thorsten Müller, founder and chairman of the board of the Environmental Energy Law Foundation, warned that eliminating the renewables levy, which currently stands at 3.27 cents per kilowatt hour (kWh), does not necessarily mean a relief for consumers if their electricity supplier doesn’t decide to change the supply contract accordingly. Müller said it would require additional legal changes to ensure that the envisaged relief reaches all households.

With the introduction of Germany’s national carbon price on transport and heating, the previous government agreed on a gradual phase-out of the surcharge. High power prices have already reduced support payments to renewables operators, as their guaranteed income is already covered by power sales.