Germany rows back in surcharge row

German energy minister Sigmar Gabriel is watering down part of a planned reform of legislation that for the first time foresees extending to self-consumed power the payment of a surcharge to finance the expansion of renewables.

After a meeting with state premier and ministers from key states with Social Democratic (SPD) governments or participation – North-Rhine-Westphalia, Rhineland-Palatinate, and Baden-Württemberg – Gabriel said he would bring their proposals into talks within the government, and with the European Commission.

Gabriel himself is the SPD’s leader and the highest-ranking government minister of his party, as well as vice-chancellor.

Fearing a further disadvantage from high energy prices for Germany’s industry, the states want to exempt already existing plants producing power for self-consumption completely from the payment of the renewables surcharge (EEG surcharge). The non-payment would also be valid for refurbished existing plants.

According to a Reuters report, the exemption from the new fee will save industry some €500m ($691m) a year.

Newly built renewables installations for self-consumption should be entitled to pay a strongly reduced EEG surcharge, the energy ministry said.

The watering-down of the fee on self-consumption comes after politicians such as Malu Dreyer (SPD), the state premier of Rhineland-Palatinate, have warned the surcharge could choke off investments in industry.

Also, some 30,000 people rallied in protests across German state capitals over the weekend against Gabriel’s reform proposals that also include a cap and support cuts to onshore wind power, the introduction of tenders for renewable energy projects, as well as the phasing in of an unpopular new regulation to force most producers of green power to sell it directly on wholesale electricity markets.

In particular Germany’s solar industry had feared that the planned new levy on self-consumption would further push down new installations figures and destroy more jobs in the already battered domestic PV sector. More than a million private households in Germany have solar roofs.

To support the expansion of renewable energies, incentives for self-consumption also in private households should be maintained in the final version of the EEG reform, the energy ministry said, but couldn’t tell how high the surcharge should be for those producers of green energy.

So far, Gabriel has proposed to extend 70% of the renewables supplement paid by power consumers on top of normal electricity prices to apply to power produced for self-consumption.

With the current level of the surcharge, that would mean that producers have to pay €0.04 ($0.06) per kilowatt hour of electricity they produce for their own use.