German government should use coronavirus stimulus funds to reduce renewables levy – think tank

Germany’s power customers face a steep rise of the renewables levy unless the government quickly follows through on plans to use revenues from the new CO₂ price in transport and buildings to finance renewables support, says energy think tank Agora Energiewende* in an analysis. The levy which consumers pay as part of their power bills to support renewables expansion looks set to increase to 8.6 cents per kilowatt hour (ct/kWh) in 2021 from its current 6.8 ct/kWh, the think tank says. However, using carbon pricing revenues would only decrease the levy marginally, the authors said. They are therefore calling on the government to devote 12 billion euros from a coronavirus economic stimulus programme to enable a total renewables levy reduction of 5 ct/kWh. This would bring the surcharge down to 3.6 ct/kWh, relieve consumers and strengthen purchasing power. “The revenues from the CO₂ price on petrol, diesel, heating oil and natural gas are not enough in decreasing the EEG-surcharge 2021,” said think tank head Patrick Graichen. A significant reduction could only be achieved by using part of the federal budget, he added.

With the impact of the coronavirus pandemic threatening to increase the levy, the discussion about decreasing or even abolishing the surcharge has become a current topic for public debate. Johannes Teyssen, CEO of energy company E.ON, recently called for the surcharges to be abolished or immediately decreased in an interview with Frankfurter Allgemeine Zeitung.

*Like Agora Energiewende, the Clean Energy Wire is funded by the Stiftung Mercator and the European Climate Foundation.