RWE, others plan surcharge to fund alternative energy

Oct. 17, 2012 at 6:17 AM
share with facebook
share with twitter
Sign up for our Energy newsletter

BERLIN, Oct. 16 (UPI) -- Germany's quick growth of renewable energy sources will mean a big jump in "green" surcharges for consumers, German energy companies said this week.

Electric grid operators RWE, E.ON, Vattenfall and EnBW said Monday the surcharge tacked onto consumer bills to help finance subsidies for wind and solar energy producers will jump by 47 percent next year.

The surcharge will rise from 3.6 cents to 5.3 cents per kilowatt-hour in 2013, representing an overall price increase of about 7 percent for consumers, The Financial Times reported.

The energy companies said the surcharges are needed to pay Germany's green energy generators $26.4 billion in feed-in tariffs next year as Chancellor Angela Merkel pushes to double renewable energy generation to 35 percent of Germany's total by 2020.

The rapid proliferation of wind and solar installations in Germany has been encouraged by the generous feed-in subsidies and by Merkel's decision to phase out nuclear power in the aftermath of last year's Fukushima disaster in Japan.

The German leader has enjoyed broad public support for the switchover to clean energy and ratepayers have been willing to accept a surcharge on their power bills to pay for it. But the surcharge hikes -- which are coming after Merkel promised last year that prices would remain stable -- are testing that support, Der Spiegel reported.

The newsweekly said an average three-person household using 3,500 kilowatts per year will see an extra $240 tacked onto their annual electricity bill due to the green technology surcharge hike.

German Environment Minister Peter Altmaier last week sought to ease fears over quickly rising energy bills by rolling out a "roadmap" to keep prices down, but the German Federal Association for Energy and Water Management at the same time warned that yet more expenses are coming consumers.

Dietmar Schutz, president of the German Federal Association of Renewable Energies, told the weekly newspaper Die Zeit that a majority of the subsidies are not actually used to produce energy but instead are "plowed into industry, compensating for falling prices on the stock markets and low revenue from the surcharge this year."

The rising costs of subsidizing renewable energy are also dividing Merkel's center-right coalition, with the junior partner Free Democrats calling last week for a cut in the surcharge, The Financial Times said.

Altmaier pointed the finger at opposition Social Democrats and Greens, saying one reason the hike is so large is that they didn't support earlier attempts to reform the system.

The left-leaning parties -- who first introduced the surcharge 10 years ago to help get the fledgling wind and solar industries off the ground -- contend that a growing list of businesses exempted from paying the fee is shifting the financial burden onto consumers.

The steel and glassmaking industries, for example, are exempt to protect their competitiveness.

Meanwhile, turf battles within the ruling coalition is resulting in delays in implementing the renewable energy switchover, Der Spiegel reported, saying the ministers from different parties are each claiming overlapping concerns as within their jurisdictions.

Related UPI Stories
Trending Stories