Higher wholesale power prices offset planned renewables surcharge cut - industry

Wholesale electricity prices in Germany have increased by about 13 percent in 2019 compared to the previous year, the energy industry lobby group BDEW has said in a press release. Meanwhile, the taxes and levies on electricity have reached their highest level ever and will likely stand at 44 billion euros in 2020. The rise in wholesale prices to 48.2 euros per megawatt hour means that the planned reduction in Germany's renewables surcharge by 0.25 cents per kilowatt hour (kWh) by 2021 "will remain ineffective," the BDEW said. Wholesale power prices only account for about one quarter of what households end up paying for electricity, while 53 percent of their bills is due to taxes, levies and surcharges, which would again increase next year, the association added. The group said doing away with Germany's electricity tax could instantly make electricity cheaper by 2 cents/kWh, offsetting the expected rise in grid fees and other power price components.

Germany has some of the highest retail power prices in Europe and lowering the price for electricity is seen by many as necessary for facilitating the transition away from fossil fuels to renewables-based technologies. In its climate package, the government said lowering the renewables surcharge will help compensate citizens for rising fossil fuel prices due to the planned introduction of a price on CO2 emissions.