Friday October 15, 2021
Update
From 2022 only 3.7 cents
EEG surcharge falls – electricity will probably remain expensive
Electricity is currently being traded at high prices on the stock exchange. Operators of wind and solar parks can sell their relatively expensive product at a profit. This has advantages for consumers: The EEG surcharge can be reduced. It is unclear whether this will really reduce the price.
The levy for financing the expansion of renewable energies will drop significantly in 2022. From next year, the EEG surcharge will be 3.723 cents per kilowatt hour instead of 6.5 cents as previously, as announced by the four transmission system operators. This could lower the price of electricity. According to the information, the most important reason for the reduction is the currently high electricity market price and the resulting high EEG account balance.
Operators of green electricity systems that feed electricity into the public supply network receive a fixed fee for this. The transmission system operators then sell the fed-in electricity on the electricity exchange. Since the prices on the stock exchange are below the statutory remuneration rates, the network operators will be reimbursed the difference. If the stock exchange price rises, the levy falls.
According to the operators, the market price for electricity on the exchange at the beginning of October was around 152 percent above the value that was assumed for 2021 last year. The levy according to the Renewable Energy Sources Act (EEG) has been levied since 2000. When it was introduced, the surcharge was 0.19 cents per kilowatt hour of electricity – since then it has increased for most of the years, but most recently it fell slightly in 2018 and 2019.
A new increase could recently only be avoided through the federal grant. The federal subsidy amounts to 0.934 cents and will be financed this year exclusively from the income from CO2 pricing, as the operators announced. Without the subsidy, the EEG surcharge would be just under 4.7 cents in the coming year.
Federal Minister of Economics Peter Altmaier spoke out in favor of completely abolishing the EEG surcharge as soon as possible – in order to relieve electricity customers. “The lower EEG surcharge in 2022 must not fizzle out as a one-off effect,” said Altmaier in Berlin. Renewable energies are becoming more and more competitive with fossil fuels, according to Altmaier.
“Especially in times when the world market prices for gas, oil and coal are rising, the sharp drop in the EEG surcharge is good and important news for consumers in Germany as well as for the economy, especially small and medium-sized enterprises.” Altmaier continues: “But I say clearly: We cannot stop at this level with the EEG surcharge.”
The effect for consumers could fizzle out
However, the EEG surcharge is only part of the electricity price. In the industry, it is expected that a falling surcharge will stabilize electricity prices overall, but that the bottom line will not decrease electricity costs. On the other hand, procurement costs that energy suppliers have to pay for electricity have risen significantly. As the Federal Network Agency announced, the sharp decline in the EEG surcharge in itself leads to a significant reduction in the burden on end consumers. An average household with an annual consumption of 3500 kilowatt hours will be relieved of more than 100 euros per year, including VAT.
The effects of rising energy prices would thus be dampened by the decrease in the EEG surcharge. “The lower EEG surcharge is good news,” said Kerstin Andreae, head of the Federal Association of Energy and Water Management. This is particularly true against the background of the sharply rising procurement costs for electricity on the wholesale markets. “The lower EEG surcharge should not, however, distract from the fact that the new federal government should decide, as one of its first official acts, to completely abolish the EEG surcharge in the coming legislative period.
The effects of the falling levy on electricity prices depend on several other factors. In addition to the EEG surcharge, there are numerous other taxes, levies and surcharges. In addition, there would be network charges. The head of the Association of Municipal Enterprises, Ingbert Liebing, said: “The EEG surcharge for 2022 will decrease. That could be very good news for consumers – if it weren’t primarily the result of increased electricity prices at the moment, and unfortunately only because of that does not yet mean sustainable relief for electricity customers. ”
In order for electricity to become cheaper in the coming years, the next federal government must resolve a swift reform of the taxes and surcharges. In the first step, the EEG surcharge should be reduced quickly and decisively through further subsidies, to zero.