Lack of planning security and high power costs biggest concerns for German utilities - survey

Undecided political issues are by far the greatest obstacle to the energy transition for the vast majority of municipal utilities and energy experts from municipal companies, according to a survey conducted by the German Association of Local Public Utilities (VKU). Among the top concerns listed by respondents were thelack of planning and investment security for municipal energy suppliers and network operators (69 percent) and the duration and requirements of current planning and approval regulations (63 percent). “The municipal utilities as practitioners and pragmatists of the energy transition want to tackle and achieve the climate targets,” said VKU managing director Ingbert Liebing. “But this will not succeed without planning and investment security. The survey identified this as the most important problem: We finally need clear, long-term, reliable framework conditions in energy policy and for the energy transition." The three most important issues for Germany’s next federal government are a reform of energy sector taxes and fees as well as CO2 pricing, Liebing said. “One look at the electricity bill is enough: electricity from renewable energy sources has to become cheaper. This makes clean electricity more competitive compared to fossil fuels and more attractive for use in the transport and heating sector.”

Liebing also called for greater transparency in CO2 pricing and is demanding an earlier price increase in order to prevent a “cost explosion” in CO2 prices after 2026. “In addition, we can use it to abolish the EEG [Renewable Energy Act] surcharge and specifically promote transformation projects. In this way we also achieve the necessary social balance," Liebing added. Germany has introduced a CO2 price in the transport and building sectors in 2021, starting with a fixed price that increases annually before allowances are auctioned from 2026 onwards.