Abolishing Germany’s renewables levy can only be a start – opinion

Germany’s largest parties call for the abolishment of the EEG surcharge – the levy power consumers pay with their electricity bills to help finance renewables – and the time is right to do so, writes Michael Bauchmüller in an opinion piece in Süddeutsche Zeitung. Leading politicians like SPD chancellor candidate Olaf Scholz and conservative economy minister Peter Altmaier had reiterated their proposals this week to support renewables through the federal budget instead of the consumer surcharge. Bauchmüller writes that economic sectors are increasingly electrified on the path to climate-neutrality and lower power prices will help speed up the transition. The time is also right to abolish the levy, because rising wholesale electricity prices due to the economic recovery lower costs for renewables support: the more expensive the green electricity can be sold, the less support has to be supplied in order to reach fixed feed-in tariffs. In addition, more and more installations cease to receive the 20-years guaranteed support, lowering the overall need of support, and the new CO2 price on transport and heating fuels brings extra revenues into the federal budget. However, Bauchmüller warns that citizens will hardly notice lower power bills, and should receive more direct support as incentive for climate-friendly behaviour – such as direct payments or support schemes for clean heating.

German politicians, researchers and the public have long debated a complete overhaul of Germany's system of energy taxes and levies and its effects on fuel prices, low-income households and state revenues. As the country’s 2021 election campaign heats up, the debate about the renewables levy (EEG surcharge) is gaining new momentum. The government coalition has already decided to use revenues from the new CO2 price in transport and heating, as well as further federal budget funds to help lower the levy.