- Ministry of Economy and Climate Protection issues legal amendment to eliminate renewables fee.
- The ruling coalition decides to accelerate the levy’s elimination ahead to mid-2022 from the beginning of 2023.
The German government has passed a draft law that, as of July 1, 2022, will eliminate the renewables fee that consumers pay with their electricity bills. The plan issued by the Ministry of Economic and Climate Protection also includes legal amendments that compel energy firms to pass on cost savings to end-users and cut electricity costs.
The draft bill will now be sent to the German parliament’s Bundestag for consideration. The approval of the Bundesrat, the legislative body that represents Germany’s 16 states, is not required. To relieve the burden on energy consumers despite rising prices, the ruling coalition decided to accelerate the levy’s elimination ahead to mid-2022 from the beginning of 2023. Compared to 2021, the abolition of the levy is estimated to save a four-person household almost EUR 300 on their annual electricity cost. As a result, consumers will pay a tax of EUR 0.0372 per kWh this year, up from EUR 0.065 per kWh in 2021.
The EEG-levy was enacted in 2000 to fund the spread of renewable energy in Germany and to compensate electricity producers for the gap between market pricing and market premium. After it is abolished, federal and climate funding will aid the deployment of more green capacity.