The renewables sector has warned plans by Germany’s government to skim off so-called “random profits” in the energy industry – even looking at doing so retroactively – are destroying investor confidence and could be unconstitutional.
The economics and climate ministry led by Robert Habeck is working under high pressure to rapidly introduce a “power price brake” after the passage of recent EU emergency measures against soaring energy costs, a ministry spokeswoman said.
“On the revenue side of the electricity price brake, a technology-specific absorption of random profits is planned. This levy on the electricity market is complex because revenues and losses on the futures market also have to be taken into account. A phased approach is currently being discussed.”
The ministry didn’t comment on more specific considerations reported by the Süddeutsche Zeitung newspaper that the lowest profit cap was planned for wind and solar, and that profits beyond the cap (plus a so-called security margin) would be skimmed off by 90%, the newspaper said, with the rule planned to be valid retroactively from 1 March 2022 on.
Berlin with the measures plans to relieve private and business electricity consumers hit by sky-high energy prices, and de-link the power prices from gas prices – without taking away incentives to save energy. Legislation is slated to pass the cabinet within four weeks.
Germany’s renewable energy federation (BEE) stressed the cost and supply crisis of fossils must not harm other energy sources, which already today were lowering power prices and are indispensable to reach climate and renewables targets.
"In our opinion, a retroactive nature of massive market interventions from March 1, 2022 on, is also unconstitutional,” BEE president Simone Peter said.
The federation warned such a measure would endanger investment and planning security, and could lead to bankruptcies during the current energy crisis.
"This massive market intervention comes at a bad time when tenders are still being undersubscribed due to years of impediments to the [renewables] expansion,” Peter said.
Germany’s latest onshore wind tendering round was heavily undersubscribed, which in the opinion of the energy sector was due to risen prices for raw materials for wind turbines and an increase in financing costs due to higher interest rates – both of which came on the heels of Russia’s invasion of Ukraine.
“The measures now proposed by the government are de facto creating a special tax law against renewable energies, which unilaterally curtails the future sectors of the future climate-neutral energy industry. That cannot be the aim of the federal government,” Peter said.
