By reducing the surcharge that helps fund renewable energy in the country, Germany is looking to ease the pressure on consumers from high energy bills. This will be reduced by 43% next year, industry and government sources told Reuters.
The renewable power support surcharge paid to producers is one of the important contributors to consumers’ electricity bills. It will be cut to approximately 3.7 euro cents per kilowatt hour (kWh) in 2022, from the current 6.5 cents in 2021.
According to different sources, the government will make up for the loss with a contribution of €3.25 billion.
The decision was made as policymakers try to limit the burden of rising power prices. Worldwide energy prices are soaring due to increased demand as economies begin to recover from coronavirus restrictions and due to reduced supply and transport and storage issues.
Nonetheless, transitioning to cleaner, greener sources of power is crucial in order to reduce the amount of harmful greenhouse gas emissions from fossil fuels and cut down on air pollution. Renewable energy also benefits economic development by offering jobs in manufacturing and installation.
Currently, Germany has the highest power prices in Europe, partly because of past subsidy schemes, but it has been phasing them out to support new green power investments.
The renewable surcharge was implemented to help with the cost of transitioning to wind and solar power and is collected by transmission grid operators. It represents a fifth part of the customer bills.
A typical German household has seen bills rise by 9.3 per cent over the past 12 months to a record €1,255 for 12 months in October, according to prices portal Verivox.
Last year alone, the surcharge collectively cost consumers €24 billion. The EEG was reduced by 3.9% this year to help the economy recover from its COVID 19 crisis.
