Income from German renewables levy set to fall significantly due to coronavirus – analysis

The coronavirus crisis is set to have a significant impact on income from the German renewables' levy as power demand falls, consultancy enplify writes in an analysis. Already in March, the surplus on the Renewable Energy Act (EEG) account fell by more than 500 million euros to 1.9 billion euros. In the past three years, it amounted to more than 5 billion euros at that time of the year. Expenditure exceeded income by 540 million euros in March 2020, partly due to lower electricity spot market prices and an increased number of hours with negative power prices. The level of the EEG surcharge is set based on assumptions about the average electricity exchange price made by transmission system operators. Changes in these prices due to lower electricity demand could lead to a deficit on the EEG account of between 3.3 billion and 7.8 billion euros at the end of this year, forecasts enplify. This also means that the EEG surcharge could rise from 6.765 to 8.25 cents per kilowatt hour in 2021, the consultancy adds.

The surcharge was projected to see its last increase in 2020, as the German government’s Climate Action Programme 2030 stipulates that revenues from the country’s planned CO2 price in transport and buildings should be used to lower the levy. But this would not be enough to cover current developments on the power market, enplify said.