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    Germany's 2020 Renewables Subsidies Hit Record


The fee structure is regressive and represents very poor value for money, according to new analysis by gas lobby group Zukunft Gas.

by: William Powell

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Natural Gas & LNG News, Europe, Carbon, Renewables, Political, Environment, Regulation, News By Country, Germany

Germany's 2020 Renewables Subsidies Hit Record

Germany's "anachronistic" renewable energy sources law (EEG) imposed a new record of €30.9 ($37.6)bn on power customers and in an inefficient way, according to the lobby group Zukunft Gas (ZG, formerly Zukunft Erdgas) in a January 12 statement. 

High funding costs and the consequences of the coronavirus pandemic such as lower revenues also created a record deficit of over €6bn, which has to be paid for with taxpayers' money. It said the EEG system is "a system that has fallen out of time and which is less and less able to distribute electricity customers' money efficiently and in the interests of climate protection."

The cost of the levy as well as the increasing costs for the expansion of the electricity grid mean that Germany has the highest consumer electricity prices in the world at an average of €0.31/kWh. Further, it is unfair on poorer people who not only have to pay the fee but also they do not own homes on which to build solar panels to collect payments.

The EEG came into force 20 years ago and was intended to launch renewable energy until it could pay its own way, "but Germans are still paying increasing sums of money for subsidies that are disproportionate to the CO2 savings actually achieved... The money raised can contribute significantly more to climate protection than is the case today. Germany leads the way when it comes to electricity prices, but is at the bottom of the table for CO2 emissions from electricity," ZG said.

The money could have bought emissions certificates for 1.24bn mt of CO2 but Germany saved just 80mn mt of CO2  last year.

ZG said that the decarbonisation of Germany through full electrification through the EEG has no cost-benefit rationale. "With existing technology, CO2 can be reduced more cheaply and quickly... Natural gas and its infrastructure are already rightly the second pillar of the energy system. In the future, the Europe-wide gas network will serve as a 'hydrogen backbone' to make better use of the European potential of sun and wind, for example from southern Europe," it said.