Germany braces itself for renewables levy hike

GERMANY: Germany's renewables levy looks set to rise following a fall in wholesale futures electricity prices to EUR 33/MWh, a historically low level.

Electricity prices are unlikely to rise while lignite and coal generation benefit from negligibly low CO2 emissions allowance prices.

The consequence is likely to be another hike in Germany's renewables levy in 2014 of up to 30%. Predictions of the rise vary from EUR 0.062-0.07/kWh in 2014 after EUR 0.053/kWh in 2013.

At least offshore wind  cannot be blamed for the rise. Although often in the firing line as "expensive", offshore wind as yet contributes only several hundred megawatts to the overall German renewables fleet of around 78GW and is accounting for only about EUR 0.0009/kWh or 1.7% of the levy in 2013.

The renewabales levy is paid by electricity consumers to cover the difference between wholesale power prices and guaranteed feed-in tariffs for renewable generation.

Electricity retailers are not passing on the low wholesale prices to household customers, which would otherwise partially compensate for the levy hike.

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