Renewables costing German households ever more cash

DPA/The Local
DPA/The Local - [email protected] • 14 Oct, 2016 Updated Fri 14 Oct 2016 16:52 CEST
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Renewable energy companies have hiked up the prices consumers have to bear to cover their costs, leading to accusations the country's "energy transition" is running out of control.

Germans will be paying 8.3 percent more to subsidize the renewable energy industry in 2017, after grid operators announced that households will be paying 6.88 cents for every kilowatt hour of energy used to fund renewables.

The previous subsidy was 6.35 cents per kilowatt hour, Bild reports.

Germany has one of the most ambitious green energy policies in the world, the so-called Energiewende (energy transition), which aims to reduce its greenhouse gas emissions by 50 percent by 2050 in comparison with 1990.

In order to encourage companies to invest in green energy, the German government has guaranteed firms a stable income for 20 years after a green energy source is connected to the grid.

But when the market price of electricity falls, households and companies make up the costs through a legal mechanism called the EEG levy.

When this mechanism was first introduced in 2000, households were paying 0.19 cents a kilowatt hour, meaning a 36-fold increase between then and now.

“The EGG levy is growing this year four times faster than the economy," Ulrich Grillo, head of the Federation of German Industries (BDI) told Bild.

"The current subsidy system is running out of control.”

Michael Fuchs, deputy leader of the Christian Democratic Union (CDU) faction in the Bundestag (German parliament), meanwhile lamented that the overall subsidies accounted for more than the entire budget of the federal Transport Ministry.
 
"We need an independent agency which sets prices for the Energiewende," he told Bild. "And we need an upper limit for subsidies."

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