Trend opinion
Regenerative energy is subsidised by the state via the Renewable Energies Act (EEG) and funded by taxation.

Facts
The fact is: The EEG green electricity levy is not, as often stated, a promotion or subsidising of green electricity by the state or through taxation. As in the case of the minimum wage debate, only the level of the prices for electricity from renewable energy sources is fixed as the minimum prices to be paid. The EEG levy principle does not function like the health fund, with income (e.g. the sale of green electricity) and expenditure (payments to the plant operators). This is how the EEG levy really works:


1. About subsidisation and minimum remuneration

Terms like “solar subsidies” are repeatedly used in the media. Even national politicians mention subsidies when discussing the EEG during interviews. Repeated reference to the subsidy concept fixes the idea in the minds of the public, but it does not become any more true.
A subsidy is a unilateral payment by the state to companies or citizens. Alongside cash payments, non-cash benefits are also possible, such as specific perquisites. In any case, subsidies are financed from public funds.

2. How the EEG levy works and is calculated
The EEG levy is not raised from taxation. The state does not pay a cent. The state only determines the minimum remuneration prices for EEG green electricity. Thus the operators of renewable energy plants receive fixed remuneration for each fed-in kilowatt hour. This generated eco or green electricity is sold on the exchange, so that income is obtained. Only the shortfall or difference from the expenditure constitutes the EEG levy.

a) The EEG levy is the difference between remuneration payments to operators and sales income from EEG green electricity on the exchange

This means: The EEG levy functions like a fund with income (sale of EEG green electricity on the exchange) and expenditure (payments to the operators). The difference, i.e. the shortfall, is the EEG levy, which is distributed among all energy consumers. The national finances are not involved, nor are taxes.

EEG levy account
The EEG levy account is managed by the transmission grid operators and updated monthly.

b) Amount of remuneration payments is not equal to EEG levy
In the media, the level of remuneration payments is often equated with the EEG levy. This is incorrect and misleading (see diagram). The remuneration payments are the gross expenditure. The income from the sale of electricity on the exchange has to be deducted from this. The lower difference is the EEG levy to be borne by the consumers.
In 2012, € 15.4 billion gross was spent on remuneration payments and € 3.7 billion for the market premium. The income from the sale (about 114 billion kWh) of EEG power comes to some € 2.9 billion according to the EEG levy account.

c) What drives the EEG levy
The EEG levy is currently 6.17 ct/kWh (2014: 6.240 ct/kWh). Compared to 2014, the levy is reduced only slightly in 2015. The latest large increase in the EEG apportionment for consumers is not caused by the expansion of renewable energies, but the exceptions for the industry payed by the consumers, which has increased from 2013 to 2014 alone 1 billion to 5 billion euros and the fall in the share price of electricity. The most important parameters influencing the amount of the EEG levy:

1. More green electricity – Higher payments to the operators
When volumes of green electricity rise, the expenditure and the payments to the operators of renewable energy plants increase.

2. Lower expenditure leads to a lower EEG levy, higher expenditure to a higher one
Companies that use a lot of power pay an EEG levy of 0.05 ct/kWh (private customer: 2014: 6.240 ct/kWh, 2015: 6.17 ct/kWh). As of 2013, the reduction threshold will be lowered from 10 GWh to 1 GWh. Because the number of companies benefiting from this will distinctly increase, the payments into the EEG levy account will be far lower and the levy will be borne by fewer and fewer shoulders.
Less expenditure thus results in a decreasing EEG levy, while more expenditure, as planned, leads to a higher levy for those who remain.
At the request of the power plant EWS Schönau, Badenova, the German association of energy consumers has initiated state aid proceedings against Germany due to the numerous exemptions of companies (case no.: SA. 22995 2011/CP).

3. Green electricity cuts exchange electricity prices - Levy mechanism does not work
The increasing proportion of renewable energy is leading to a constant lowering of electricity purchase prices on the spot and futures markets. Because the exchange power prices are, in some cases, falling to a record low due to the sale of green electricity, the difference costs and thus the EEG levy are increasing (see diagram). Conversely, better exchange marketing of EEG power means a falling EEG levy.

eeg appointment 2015
The calculation that low electricity purchase prices lower the purchasing costs of electricity suppliers and thus make up for or temper the increase in the EEG levy has not turned out to be true in practice. The falling purchase prices are not correspondingly passed on by the suppliers to the consumers or electricity customers, but the rising EEG levy definitely is.



Links
1. Transmission system operators: EEG ley account - Income and expenditures

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