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Germany: 25 Percent Cut In German Electricity Tax Pledged

Monday, 19 August 2013   (0 Comments)
Posted by: Author: Ulrika Lomas
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Author: Ulrika Lomas

German Social Democrat (SPD) Chancellor candidate Peer Steinbrück has announced plans, if elected, to reduce the country's renewable energy levy (EEG-Umlage) by 25 percent, to stabilize soaring electricity prices in Germany, thereby reducing the fiscal burden on consumers to the tune of around EUR1.6bn (USD2.1bn).

Designed to promote renewable energy, Germany's renewable energy levy has risen year-on-year. Indeed, the EEG-Umlage rose dramatically at the beginning of 2013, increasing from 3.59 cents per kilowatt-hour to 5.277 cents, pushing already mounting electricity prices even higher.

Unveiling details of the SPD's ten-point plan, aimed at ensuring a successful transition to renewable sources of energy, Steinbrück explained that as a first measure the party would lower the renewable energy levy, or so-called "electricity tax." Such a move will create time in which to fundamentally reform the country's renewable energy law (EEG), and to introduce completely new energy market regulations, for example, he stressed.

Furthermore, Steinbrück confirmed plans to once again limit renewable energy tax breaks to energy intensive companies in Germany, faced with strong international competition.

Vehemently criticizing the black-yellow coalition Government for its "disastrous management" of the shift in energy, Steinbrück alluded to Chancellor Angela Merkel's pledge back in 2011, when she insisted that the EEG-Umlage would not exceed 3.5 cents per kilowatt-hour. This was a grave miscalculation, the German Chancellor candidate insisted, noting that since then the levy has risen to almost 5.3 cents per kilowatt-hour, costing the average household in Germany EUR185 a year.

The German consumer association VZBV has also called for action, urging the coalition Government to part finance the cost of promoting renewable energy using federal tax revenues, rather than via the renewable energy levy. Firmly opposed to the idea, German Environment Minister Peter Altmaier alluded to the proposal as ill thought through and simply unfeasible. A further rise in the renewable energy levy could still not be ruled out, Altmaier maintained.

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