October 15, 2016
Germany

Germans to pay higher surcharge for renewable energy in 2017

UPDATE 1-Germans to pay higher surcharge for renewable energy in 2017 | Reuters | Oct 14, 2016 | reuters.com

German consumers will have to pay a higher surcharge to help fund renewable energy next year despite government efforts to scale back support for green power, the country’s network operators (TSOs) said on Friday.

The surcharge under the renewable energy act (EEG) will amount to 6.88 euro cents per kilowatt hour (kWh) in 2017, an increase of 8.3 percent from this year, the four TSOs that collect the fee said in a joint statement.

The expansion of onshore wind power capacity was the main factor pushing up the cost, they said. The fee makes up just over a fifth of consumers’ final bills.

An average household consuming 3,500 kWh a year will pay a total of 286 euros, including sales tax, towards the EEG next year.

The fee makes the biggest single contribution to financing Germany’s Energiewende policy shift to more renewable power. It should amount to 24.4 billion euros ($27.3 billion) this year, the TSOs said.

Its increase has created concern and has encouraged government reforms to a system of rewarding green energy with above-market payments, and mandating they must be better integrated into the wholesale market via auctions.

German industry lobby BDI said it was alarmed about the rising costs. “The EEG surcharge is growing nearly four-and-a-half time the level of the overall economy,” it wrote.

German energy group Innogy said it planned to keep retail power and gas prices stable despite the higher surcharge, absorbing the cost itself.

The eventual cost of the surcharge depends on weather patterns – which rule how much renewable energy is produced and entitled to support from the EEG account – once it is fed into the grid.

But as Germany is adding more renewable capacity, more money is inevitably paid out under the EEG, which was drawn up to help young technologies such as wind turbines and solar panels compete with conventional energy.

The four high voltage network operators are utility EnBW’s TransnetBW, Belgian Elia’s 50Hertz, the German arm of Dutch TenneT (IPO-TTH.AS), and Amprion, in which utility RWE has a minority stake.

Looking ahead over the next five years, they said that the installed capacity of renewables would likely expand to 121 gigawatt (GW) in 2021, compared with an assumed level to 103 GW in 2017.

Green power production could amount to 187 terawatt hours (TWh) in 2021, compared with an estimated 176 TWh.