Germany Eyes Special Levy On Eco-Energy Providers

by Ulrika Lomas, Tax-News.com, Brussels

04 September 2012

Setting out to curb the expansion of renewable energy in Germany by drastic measures, Free Democratic Party (FDP) parliamentary chairman Rainer Brüderle has put forward the idea in a recent paper of imposing a moratorium on the building of new wind turbines and solar installations and of imposing a special levy on operators.

Germany’s shift towards renewable sources of energy is hurtling into grave difficulties, with the government encountering major problems, notably too many installations, an insufficient supply network and exorbitant energy prices.

Leading government politicians are therefore eager to slow the tempo of expanding renewable energy production. The proposed levy on eco-energy providers would serve to contribute to the costs of expanding the network and would also contribute towards the use of new storage technologies.

The rapid expansion of renewable energy in Germany has come under increasing criticism of late, with one of biggest problems being soaring electricity prices. The expansion of the electricity network is expensive and is progressing far too slowly. Networks are urgently needed to transport electricity from wind turbines in the North Sea throughout Germany, for example.

Up until now there have been huge incentives from the state for operators to build new wind and solar installations. Operators are guaranteed a fixed price for the electricity produced over a period of many years, with the fixed price being significantly above the actual price at which electricity is sold, and with consumers forced to pay the difference in their electricity bills. The incentives are also leading to a problem of over capacity.

Germany’s Environment Minister Peter Altmaier has already advocated capping the expansion of installations. Economy Minister Philipp Rösler (FDP) has called for the incentives applicable to renewable energy to be swiftly scaled back.

The FDP aims to put forward its own proposal for a new renewable energy law (EEG) in the autumn.

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