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Germany will reduce the renewables fee for households. It responds to rising energy prices

Germany will reduce by 42.7 percent the fee paid by consumers to promote renewable energy sources. In this way, Berlin wants to help households better cope with rising energy prices. The so-called green surcharge will now be reduced to 3.723 eurocents (0.95 CZK) per kilowatt hour, network operators said. This is the lowest level since 2012.

The state will compensate for the shortfall in surcharge revenues with a subsidy of 3.25 billion euros financed from carbon tax revenues. The reduction of the contribution will take effect from 1 January 2022. Germany and other governments in Europe are trying to relieve consumers in a situation where gas prices are rising sharply.

Last year, the fee was reduced by 3.9 percent to help the economy recover from the slump caused by the covid-19 pandemic. The fee compensates for the difference between the market price of electricity from renewable sources and its fixed purchase prices, which German producers of so-called green electricity are guaranteed for 20 years in advance.

Germany supports renewables as part of its energy transformation plan, which states that environmentally friendly power plants should replace the output of nuclear and coal resources.

The fee makes up about a fifth of a consumer’s energy bill. According to the Verivox price comparison portal, an ordinary household with an annual consumption of 4,000 kWh will save 132 euros (CZK 3,350) per year after reducing the fee. However, this will probably not reduce the total cost of electricity, as the cost of purchasing electricity paid by suppliers has increased significantly.

Transmission system operators Amprion, 50Hertz, TransnetBW and Tennet expect an increase in renewable energy production by 11 terawatt hours (TWh) to 239 TWh next year. At expected market prices, this amounts to 22.8 billion euros, Reuters reported.

The head of the German Association of the Energy and Water Industry (BDEW), Kerstin Andreae, said that the reduction in the fee was good news, especially in connection with the sharply rising costs of buying electricity on wholesale markets. According to her, the new federal government should then, as one of its first official steps, decide on the complete abolition of this fee. According to her, this would permanently relieve small customers and small and medium-sized enterprises.

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