Government auditors call for reform of Germany's energy taxes and levies

Germany’s Federal Court of Auditors (BRH) has criticised the government for its “inadequate” management of the energy transition. In a new report, the BRH argues that the economy ministry (BMWi) doesn’t do enough to ensure supply security, and warns of high electricity prices that will burden households and put German competitiveness at risk. It also states that “too little has been done to make the energy transition successful” since the group’s first review in 2018.

According to BRH, German households and small and medium enterprises currently pay the highest electricity prices in Europe. These prices are likely to rise in future due to the costs of further grid expansion and renewable energy expansion, which may “jeopardise the acceptance” of the energy transition, the court warns. “Action is needed here: We propose fundamentally reforming the system of state levies and taxes [on energy],” Scheller said. In response to the report, the German association of small and medium-sized businesses (BVMW) underlined that small and medium enterprises “depend on competitive energy costs” and that “the federal government fails to offer private households and SMEs competitive electricity prices.”

The BMWi’s monitoring of the power supply does not cover aspects of supply reliability and system security, or covers them inadequately, the report states. The BRH also says that the BMWi has has not analysed a “worst-case scenario” in which various risk factors coincide, such as the coal phase-out, the faltering grid expansion, and the increase in electricity demand due to new hydrogen production plans. "The BMWi is not effectively preventing these real threats to a secure power supply," said Kay Scheller, head of the BRH. "It urgently needs to complete its monitoring."

The independent Federal Court of Auditors is charged with the external examination of the German budget.