October 15, 2018 / 9:51 AM / a month ago

Germans to pay slightly lower levy for renewable energy in 2019

FRANKFURT (Reuters) - Germany will cut a green energy surcharge on consumers’ electricity bills by 5.7 percent next year, but savings for households will be limited as other fees are expected to rise.

Germans pay the highest electricity bills in Europe as state-induced taxes and fees account for over 50 percent of power bills.

German power network operators (TSOs) said on Monday that revenues collected to support green electricity are high and wholesale market prices have risen, allowing renewables producers to rely less on subsidies.

Next year the surcharge under the renewable energy act (EEG) - a fee that accounts for over a fifth of energy bills - will fall to 6.405 euro cents (7.4 US cents) per kilowatt hour (kWh), from 6.792 cents this year, TSOs said in a statement.

That was a steeper cut than forecast by industry group BEE last week, but may be offset by rises in other levies such as those on use of transport grids.

“Consumers should not pin too much hope on noteworthy price cuts by their electricity suppliers,” said Arik Meyer, managing director of SwitchUp, an online service for supplier switches.

The portal calculated that a typical household consuming 3,500 kWh per year would save just 13.72 euros through the move.

Another portal, Check24, said the bulk of network fees charged for use of transport lines for power, another big cost element accounting for a quarter of bills, look set to rise by 3.5 percent, likely eating up much of the EEG savings.

The EEG fee makes up around 23 percent of consumers’ final bills, making it the biggest and most symbolic spending under Germany’s Energiewende policy to transition to renewables.

Payouts under the EEG this year are expected to amount to over 25 billion euros, according to industry estimates.

The eventual cost depends on weather patterns — which determine how much renewable energy is produced and entitled to support under the EEG once it is fed into the grid.

EEG payouts partly reflect the ongoing increase in renewable installations, mainly wind turbines and solar panels.

These receive above-market state support in order to make them competitive with conventional energy generation, whose output is priced by the wholesale market.

While reforms to the EEG are gradually scaling back subsidies, units constructed in recent years still fall under a rolling 20-year price guarantee that could continue to boost spending over the next few years, analysts say.

Energy regulator the Bundesnetzagentur said renewable producers will add 6 gigawatts (GW) of capacity next year.

($1 = 0.8643 euros)

Reporting by Vera Eckert; Editing by Maria Sheahan and Susan Fenton

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