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Germans to pay slightly lower surcharge for renewable energy in 2018

Germans to pay slightly lower surcharge for renewable energy in 2018


* Fee for green energy expansion goes down 1.3 pct
* Not much room to cut consumer bills
* Government reforms aim at lowering future fees
* But old style subsidies still being carried forward (Adds details, impact, context, analyst comment)

FRANKFURT, Oct 16 – A surcharge levied on German power bills to support renewable energy will fall by 1.3 percent next year, but the relief to consumers from the move will be limited, the country’s network operators (TSOs) said on Monday.

The surcharge under the renewable energy act (EEG) will amount to 6.792 euro cents (8.01 U.S. dollar cents) per kilowatt-hour (kWh) in 2018, down from 6.880 cents this year, the four TSOs that collect the fee said in a joint statement.

The TSOs said that reserve funds collected to support the expansion of green electricity had risen to levels exceeding anticipated payouts, making the reduction possible. This confirmed forecasts by industry sources.

Consumer portal Verivox said that an average household consuming 4,000 kWh a year should save only 4 euros ($4.72) next year through the move, arriving at a bill of 1,127 euros for 2018.
The fee makes up a fifth of consumers’ final bills.

It represents the biggest and most symbolic spending block for Germany’s Energiewende policy to transition to renewables.
The eventual cost depends on weather patterns — which govern how much renewable energy is produced and entitled to support from the EEG account — once it is fed into the grid.

The figure partly reflects the increase in renewable installations, mainly wind turbines and solar panels.

These receive above-market payments in order to make them competitive with conventional energy generation whose output is priced by the wholesale market.

The total EEG value should amount to 23.78 billion euros next year, the TSOs said, but the account including liquidity reserves on Sept. 30, 2017, had a positive balance of 3.3 billion euros.

Government reforms have kicked in this year, forcing companies bidding for new construction permits to compete in auctions.
These reforms will gradually help scale back support, but units constructed in recent years still fall under a rolling 20-year prices guarantee that could continue to boost spending over the next few years, analysts say.

“A sustainable fall in the surcharge can only be expected for the early 2020s when the EEG payments to the first generation of extremely highly subsidised installations of the early 2000s expire,” said Manual Koehler, managing director of the German branch of Britain’s Aurora Energy Research.

Utility industry group BDEW said the government should give thought to ways to “relieve the power price from the ballast of state-induced charges.” ($1 = 0.8482 euros)

Source: Reuters
Anand Gupta Editor - EQ Int'l Media Network


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