15 October 2020. Bayreuth, Berlin, Dortmund, Stuttgart. Germany's federal government has set the EEG surcharge for 2021 at 6.500 cents. To enable this cap to be met, it has also approved a federal subsidy, the amount of which was announced today by the four German transmission system operators (TSOs) 50Hertz, Amprion, TenneT and TransnetBW. The subsidy, which is designed to stabilise the EEG surcharge, stands at just under €10.8 billion for 2021. The federal subsidy will be funded by annual revenues from the new CO2 pricing mechanism within the national emissions trading scheme as well as the economic stimulus package approved by the federal government in summer 2020. Without this subsidy, the EEG surcharge for 2021 would be 9.651 ct/kWh, which is significantly higher than in 2020 (6.756 ct/kWh). The main reasons for the increase, which will not take effect thanks to the federal subsidy, are the decline in electricity market prices, primarily due to the coronavirus crisis, and the drop in final electricity consumption, also mainly caused by the COVID-19 pandemic. According to the latest assessments, preliminary net electricity demand in Germany for 2020 is around 8% below the value assumed last year.
At the same time, the offshore grid surcharge for 2021 has also been published. It includes the costs for expansion of the offshore grid in the North Sea and the Baltic as well as compensation payments to installation operators due to disruptions or delays. At 0.395 ct/kWh, the 2021 surcharge is slightly lower than that for 2020 (0.416 ct/kWh).
About the EEG surcharge:
The EEG surcharge is calculated based on forecasts for the expected feed-in in 2021 from renewable electricity generation installations, as defined in the German Renewable Energy Sources Act (EEG), as well as expected electricity consumption. For 2021, the calculations result in a total surcharge (before the federal subsidy) of €33.1 billion. The EEG surcharge is paid by end consumers for each kilowatt-hour purchased and is used to promote renewable energies in the electricity sector. The TSOs levy the surcharge in accordance with the statutory provisions of the EEG.
Compared with the 2020 forecast, electricity from renewable installations in 2021 is expected to increase by around a further 3 terawatt-hours (TWh) to approximately 228 TWh (corresponding to funding of €27.9 billion). Excluding the expected energy exchange profits, which are 22.3% lower than the forecast for 2020, mainly due to market prices, and taking into account other costs and revenues, the predicted shortfall for 2021 amounts to around €26.4 billion. This corresponds to a core surcharge of around 7.7 ct/kWh for 2021. Of this, around 2.8 ct/kWh will go to photovoltaic energy, approximately 1.8 ct/kWh to energy from biomass, around 1.7 ct/kWh to onshore wind power and roughly 1.3 ct/kWh to offshore wind power.
For the final surcharge calculation, the EEG account balance as at 30 September and the liquidity reserve also have to be taken into account. As at 30 September 2020, the EEG account had a negative balance of €4.1 billion. One of the main factors affecting this deficit was the unexpectedly sharp fall in the electricity market price in 2020. The market price for 2020 is currently around 38% below the value set last year for the 2020 EEG surcharge in accordance with legal requirements. The negative balance of the 2020 EEG account was taken into account when determining the 2021 EEG surcharge before the federal subsidy, thereby raising the surcharge by around 1.2 ct/kWh.
The liquidity reserve is set at 10% of the predicted funding shortfall, and so stands at around €2.6 billion in 2021. The share of the liquidity reserve in the EEG surcharge before the federal subsidy is approximately 0.8 ct/kWh.
The liquidity reserve serves to cushion fluctuations in the EEG account. These fluctuations arise from discrepancies between the forecast and the actual feed-in of renewable energy. For example, a particularly sunny year leads to higher payments for electricity from photovoltaic systems than would be expected in an average year. Moreover, a fall in market prices means that payments for electricity from renewable energy installations rise more sharply while revenues from electricity sales fall.
Together, these cost components would result in an EEG surcharge in 2021 of 9.651 ct/kWh, before the federal subsidy. To achieve the 2021 EEG surcharge of 6.500 ct/kWh, as set by policymakers, the federal government has to finance just under €10.8 billion, which lowers the EEG surcharge by just under 3.2 ct/kWh. The EEG surcharge is determined based on forecasts by independent experts in coordination with the Federal Network Agency (Bundesnetzagentur, BNetzA). The BNetzA monitors the determination, definition, publication and distribution of the EEG surcharge and the marketing of EEG electricity volumes, and also regulates the associated marketing requirements.
About the medium-term forecast:
Along with the EEG surcharge, the four German TSOs also published the EEG medium-term forecast ('EEG-Vorschau'). This covers the likely development of feed-in from renewable electricity generation installations, as defined in the EEG, over the next five years. In accordance with the legal requirements, the publication includes forecast data on installed capacity, the annual volume of electricity fed in, the financial support to be paid to installation operators, and end consumer sales. More detailed information about this can be found (in German) at http://www.netztransparenz.de/EEG/Mittelfristprognosen/Mittelfristprognose-2021-2025
Download the press release as PDF file
Further information (in German) can be found here:
EEG surcharge: http://www.netztransparenz.de/EEG/EEG-Umlagen-Uebersicht
Offshore grid surcharge: http://www.netztransparenz.de/EnWG/Offshore-Netzumlage/Offshore-Netzumlagen-Uebersicht/Offshore-Netzumlage-2021
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