Germany

Germany

German renewables levy to peak in 2021

The surcharge funding Germany's green energy expansion will rise in 2020 and peak in 2021, before falling as first-generation renewable power plants' 20-year contracts expire, according to a clean energy think tank.

Germany’s transmission system operators are expected to announce the EEG surcharges for 2020 on 15 October (pic credit: Tennet)
Germany’s transmission system operators are expected to announce the EEG surcharges for 2020 on 15 October (pic credit: Tennet)

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Agora Energiewende predicted the EEG (Renewable Energy Act) surcharge will increase from €64.10/MWh this year to €65-67/MWh for 2020, and about €70/MWh in 2021.

Beyond that the 20-year contracts guaranteeing EEG payments for "cost-intensive first-generation" power plants will gradually end, causing the surcharge to fall, the think tank said.

Germany’s transmission system operators are expected to announce the EEG surcharges for 2020 on 15 October.

Calculation

Agora Energiewende noted that, when inflation is taken into account, the surcharge forecast for 2020 would be the lowest since 2014.

However, electricity bills are expected to rise by €10/MWh.

About half of this increase will be due to rising electricity prices, while the rise in the EEG surcharge and other levies – including grid charges and will account for the remainder.

Coal and gas generation is being made more expensive due to the rising carbon tax, the think tank said.

Meanwhile, the expansion of Germany’s offshore wind fleet will partly fuel the increase of the EEG surcharge for next year, Agora Energiewende noted.

The country’s offshore wind capacity is expected to grow from 6.4GW to 7.8GW by 2020, with payments being required for new projects under the EEG.

Surpluses being put back into EEG will also contribute to the rising surcharge, the think thank added.

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