German renewables levy to rise slightly in 2020 and peak the year after – think tank
Clean Energy Wire
Germany's renewables levy, the EEG surcharge, is expected to rise slightly from 6.41 cents per kilowatt-hour (kWh) this year to between 6.5 and 6.7 in 2020, according to calculations by think tank Agora Energiewende*. The main reasons for the expected rise are increasing wind power capacity and a declining balance in Germany’s “green energy account”, writes Agora Energiewende. After having remained relatively stable in recent years, Agora Energiewende forecasts that the levy will reach its final peak in 2021 at around 7 cents/kWh. Around then, the first renewable energy plants will have lived out their 20 years of set feed-in payments guaranteed by the Renewable Energy Act (EEG), leading the levy to "gradually fall", says head of Agora Energiewende Patrick Graichen.
The Renewable Energy Act (EEG) has guaranteed producers of renewable power in Germany 20 years of set feed-in payment per kWh since the year 2000, in order to make renewable sources competitive with conventional energy. For many installations, that two-decade guarantee is set to expire just as Germany wants to boost the share of renewables in power consumption to 65 percent.
In the first half of 2019, rising carbon prices have already started "driving climate-damaging coal-fired power plants out of the market," said Graichen. With a carbon price of 50 euros per tonne of CO2 (currently at 27 euros), "we could get a largely self-supporting energy transition," said Graichen. Already now, the first solar projects in Germany are being built without any support from the EEG-levy, he added.
*Like the Clean Energy Wire, Agora Energiewende is a project funded by Stiftung Mercator and the European Climate Foundation.