Rising EEG surcharge drives up electricity prices

The green electricity subsidy will increase by 5,5 percent next year. This was recently announced by the operators of the major power grids. This means that electricity will likely become even more expensive in the future.

The transmission system operators have announced the amount of the EEG surcharge for the coming year. It will rise from the current 6,405 cents per kilowatt hour (kWh) to 6,756 cents per kWh . This corresponds to an increase of 5,5 percent . The surcharge had decreased for the last two years.

"An economics minister can't be happy about a rising EEG surcharge. Despite this increase, however, we 've seen stable development for six years now ," says Federal Economics Minister Peter Altmaier (CDU). "The reforms we've implemented in recent years have made the expansion of renewable energies significantly cheaper. But we're also carrying around some cost baggage from the early years."

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Affordable prices as a core concern

Ensuring affordable electricity prices is a key priority for the Minister. "That's why, as part of the recent climate policy decisions, we have decided on a gradual reduction of the EEG surcharge starting in 2021. This will ease the burden on electricity prices for both citizens and small and medium-sized enterprises."

The four German transmission system operators 50Hertz , Amprion , TenneT , and TransnetBW are forecasting an increase in electricity from renewable energy plants of approximately 8,6 terawatt-hours (TWh) for the coming year. This corresponds to a subsidy amount of €26,2 billion . After deducting the projected exchange revenues (increased by 1,4 percent), this results in a funding gap of approximately €24,2 billion for 2020.

Lower EEG account balance leads to increase in the surcharge

This corresponds to a core levy for 2020 of approximately 6,8 cents per kWh . The final levy calculation also incorporates the balance of the EEG account and the so-called liquidity reserve. At the end of September 2019, the EEG account had a surplus of €2,2 billion. This positive balance was taken into account and reduces the EEG levy. However, since the account balance was around 40 percent lower than at the end of September 2018, this also leads to an increase in the EEG levy for 2020.