July 26, 2016 / 10:00 AM / 2 years ago

German households face higher green power surcharge - portal

FRANKFURT (Reuters) - The green energy surcharge levied on German consumers to support renewable power is likely to rise by up to 15 percent next year, making electricity more expensive although weaker fuel prices could allow savings, an Internet price portal showed on Tuesday.

A shepherd and his flock of sheep walk on a pasture in front of power-generating windmill turbines of a wind farm near the village of Berge west of Berlin October 9, 2007. REUTERS/Arnd Wiegmann

While the government tries to rein in rising costs involved in moving Germany to a low-carbon economy, the mechanisms triggered by a law governing the sector normally do not allow for price reductions, the Check24 portal said.

The so-called EEG surcharge is officially set by transmission grid operators for each coming calendar year on Oct. 15.

For 2017, it may rise to between 7.1 and 7.3 euro cents (5.9p 6.1p) to per kilowatt-hour (kWh) from 6.354 euro cents applied in 2016, the portal said in a statement, citing figures from think tank Agora, energy group BDEW and the energy exchange EEX.

“A cut in end-customer prices is unlikely, given the rising EEG charge, although utilities could charge less because procurement costs have fallen,” said Managing Director Oliver Bohr.

The fee added up to 24 billion euros last year and since its introduction in 2000 has dropped only once, in 2015.

More than half the average power bill of a home using 5,000 kWh annually - 1,364 euros last year - was made up of state charges and fees. Within that, the EEG accounted for 70 percent.

The increase results firstly from a widening gap between high EEG prices, set for 20 years, and falling wholesale prices achieved by thermal power plants as fuel prices slump.

Market prices on the EEX in the first half of 2016 were 21 percent below those in the same period of 2015. [EL/DE]

The EEG provides for the difference to be reimbursed in order to help renewables operators that were initially unable to compete on cost alone.

Secondly, as green capacity to harness wind, sunshine and biomass is added to meet long-term expansion goals, support payments add up, although reforms seek to abolish them eventually.

Check24 advised customers to use price comparisons to switch to low-cost suppliers.

Editing by Dale Hudson

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