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25/05/2016

German green power tariff to rise 47% in 2013

Energy

German green power tariff to rise 47% in 2013

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Renewable power subsidies levied on German consumers will rise by 47% next year, putting pressure on Chancellor Angela Merkel's ruling coalition to keep energy costs in check ahead of federal elections.

Merkel's decision to abandon nuclear power following last year's Fukushima disaster has led to a growing need for alternative energy sources, and that has led to higher charges tagged on to consumers' energy bills.

Opposition parties say that the government is letting private consumers bear the brunt, after it exempted energy-intensive industry from green energy and network usage tariffs.

Germany’s surcharge for renewable energy will rise to 5.3 cents per kilowatt hour (kWh) in 2013 from 3.6 cents in 2012, Germany's four leading high voltage network operators said on Monday (15 October).

Overall, the so-called 'Umlage' will reach €20.36 billion next year, the operators said.

Coming a year ahead of a federal election in which Merkel will seek a third term, the sharp rise in energy duties has become a major issue, potentially forcing the government to find ways to limit costs for consumers.

It has also opened divisions in the coalition with the Free Democrats (FDP), a junior partner to Merkel's conservatives, which calls for steeper cuts in government-mandated incentives, and a more sweeping reform of the renewable energy law.

The four network operators are 50Hertz, owned by Belgian Elia and Australian fund IFM; E.ON's former high voltage grid unit TenneT; RWE's former unit Amprion, and EnBW's grid unit TransnetBW.

Background

The EU has set itself a legally binding goal for 2020 of reducing its CO2 emissions by 20% and increasing the share of renewables in the energy mix by the same amount, both measured against 1990 levels.

A target of a 20% increase in energy efficiency has also been set but it is not legally enforceable. The low carbon roadmap in March 2011 stated that if it were met, emissions cuts would automatically rise to 25%, five percentage points above the target.

In October 2009, EU leaders endorsed a long-term target of reducing collective developed country emissions by 80-95% by 2050 compared to 1990 levels. This is in line with the recommendations of the UN's scientific arm - the Intergovernmental Panel on Climate Change (IPCC) - for preventing catastrophic changes to the Earth's climate.

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