The Federal Association of Energy and Water Industries has spoken out in favor of easing the burden on electricity customers. Due to decisions made by the federal government, energy prices are expected to rise this year, said Managing Director Kerstin Andreae in Berlin. If the state cancels announced relief measures such as the subsidy for network fees, this will also have an impact on consumers.
The network fees are part of the electricity price. Due to austerity constraints in the budget, the coalition canceled a planned federal subsidy for the proportional financing of transmission network costs of up to 5.5 billion euros this year.
Association: Reduce electricity tax for everyone
In a European comparison, Germany still has the second highest amount of taxes, duties and levies behind Denmark, although electricity consumers no longer have to finance the EEG surcharge to promote green electricity, says Andreae. She called for the electricity tax to be reduced to the European minimum for all consumers. This would be an effective and easy-to-implement option to reduce electricity prices. The federal government is planning to reduce electricity taxes for the manufacturing sector.
Andreae also called for “transformation costs” to be financed from the federal budget. So-called congestion management measures – because the expansion of the electricity network is not progressing quickly enough – cost around 4 billion euros in 2022, which will be financed through network fees.
The expansion of renewable energies is making progress
Last year, renewable energies, especially from wind and sun, supplied more than 50 percent of electricity generation in Germany for the first time. Electricity generation fell overall. However, renewable energies also provided more electricity overall than in the previous year. According to the association, the most important energy source in the electricity mix was wind energy, followed by lignite and natural gas.
Andreae called for further relief for the expansion of green electricity. The Bundestag has not yet passed a planned solar package that is intended to remove obstacles to the construction of solar systems.
According to the association, for the first time since 2002, Germany was a net importer of electricity again – that means more electricity was imported from abroad than exported. Electricity exports fell by 24 percent compared to the previous year, while electricity imports increased by 38 percent.
In recent months, cheaper generation options have been available in neighboring countries to meet demand in Germany than would have been the case in Germany, according to the association. In particular, electricity generation from hard coal and lignite power plants in Germany has fallen significantly due to relatively high CO2 prices and an overall low level of electricity consumption. However, the closure of the last three nuclear power plants in Germany and the higher availability of nuclear energy in France compared to the previous year are also reasons for the import surplus. Higher electricity imports neither mean dependence on other European countries for electricity supplies nor are they an indicator of shortages in Germany.
Power plant strategy urgently needed
The energy industry has been waiting for a long time for a strategy from the Ministry of Economic Affairs to build new, hydrogen-capable gas power plants by 2030. They are supposed to step in as a “backup” in “dark periods” – when there is no wind and no sun shining – to cover electricity demand. However, energy companies have so far been reluctant to invest because the new power plants are not profitable.
Andreae spoke out in favor of government investment subsidies. The strategy must come as quickly as possible. The fastest time to build a hydrogen-capable gas power plant is six years. This also raises the question of whether an early phase-out of coal by 2030 will be successful.
