Germany approves renewable energy reform

• 9 years ago (2014-06-30)
• Junior Isles

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Germany’s Bundestag, the lower house of  parliament, has approved a range of reforms of the country’s renewable energy act (EEG) in an attempt to slow energy cost increases and achieve a sustainable energy transition.

The reform includes reducing subsidies for renewable energy power systems and a stronger control of the expansion of green energy.

German companies will now face strict criteria when applying for discounts on green energy surcharges paid by electricity users to support the country’s energy transition.

In addition, companies that generate their own electricity will be required to pay green energy surcharges to help subsidise the country’s renewable energy programme. So far, they have been excluded from paying the surcharges.

In the wake of the Fukushima nuclear disaster, Germany took the decision to nearly double its share of renewable energy to 45 per cent by 2025. Its ambitious energy transition, however, has seen many problems including a sharp rise in the domestic electricity costs.

The EEG, the main pillar of Germany’s energy transition, establishes guaranteed feed-in tariffs for all electricity generated by renewable energy sources.

The gap between the market price of electricity and this fixed tariff is filled by renewable energy surcharges. Since energy-intensive enterprises have been exempted from paying the surcharges, other consumers have to pay more.

With a revised EEG act, set to come into force in August, the German government hopes to put the energy transition on a sustainable path.