The four German transmission system operators (TSOs) today announced the renewable energy levy for 2017 of 6.88 cents/kilowatt hour (kWh), an increase of 8.3% compared with 2016. In Germany, renewable promotion is currently paid for by electricity consumers through a surcharge on electricity taken from the grid – the ‘EEG levy’. The total EEG levy cost in Germany for 2017 is expected to exceed €24 billion.
There are several drivers behind the recent increase in the cost of the levy:
- Low expected wholesale power prices at the power exchange drive an increasing wedge between market revenues and guaranteed support levels, which are fixed for 20 years of operations.
- The renewable promotion scheme has led to an ongoing expansion of renewables in Germany – total supported generation is expected to increase by 6% between 2016 and 2017.
- The increase in promotion costs is limited by a surplus on the EEG account, currently around €2 billion.
- The German Federal Ministry for Economic Affairs and Energy Frontier (BMWi) has recently published a study by Frontier (Europe) and engineering consultancy BET on the implications of introducing a dynamic renewable energy levy in Germany.
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