Scooping up German energy company’s windfall profits should end by mid-2023 – minister

The scooping up of windfall profits of energy companies in Germany should end by mid-2023, economy and climate minister Robert Habeck has said. The measure that was introduced to co-fund support measures for consumers in the energy crisis would no longer be appropriate, Habeck said in a dpa news agency article  carried by Handelsblatt. “There’s nothing to scoop up at this moment anyway, since markets have calmed down again,” Habeck said at a conference. “We don’t need a bureaucratic instrument that no longer has an effect,” the Green Party minister added. However, he defended the mechanism in principle, given the high costs the state has to cover in the energy crisis. “I think it’s reasonable and appropriate that we’ve done this,” he said. Estimates had shown that price hikes as those seen in 2022 would be highly unlikely in the near future, Habeck added. The debate about siphoning off windfall profits from power producers in the energy crisis had scared away investors in renewable energy projects in the past months, Hermann Albers, head of the German Wind Power Federation (BWE), commented.

Many energy companies made enormous profits in 2022 due to rapidly rising energy prices caused by the market turmoil in the wake of Russia’s invasion of Ukraine. Scooping up parts of these unexpected gains had been agreed especially to fund the “energy price brakes” that support payments for gas and electricity consumption, which are currently slated to last until the end of June. Most of the gains made in the past year will not be touched, however, since the measure only includes profits made since 1 December 2022, at which point costs for most energy products had already peaked.