Germany's green energy surcharge to go down next year

Faced with soaring utility bills, households in Germany can look forward to some relief next year: the federal government has announced that it will reduce the “EEG” green energy surcharge by almost half in 2022. 

Germany’s EEG levy to fall by 40 percent in 2022

The surcharge, which makes up around a quarter of the price of electricity in Germany for private households, will fall by a good 40 percent in 2022. A government subsidy costing billions of euros will ensure that the EEG levy will drop from the current 6,5 cents to 3,723 cents per kilowatt hour from January 1, 2022. 

For an average three-person household, the reduction amounts to relief of around 100 euros per year. Many companies will also benefit from the reduction. 

The renewable energy surcharge (Erneuerbare-Energien-Umlage or EEG) has been added to the price of electricity since 2000 to support the expansion of green electricity systems in Germany. However, Economy Minister Peter Altmaier stated recently that the EEG surcharge should be phased out completely over the next few years "to keep power affordable."

Levy reduction may not be felt by customers

The reduction of the levy in 2022 has been made possible, among other things, by the newly-introduced nationwide tax on CO2 emissions in transport and building. In addition, rapidly-rising prices for gas and coal have led to a sharp rise in the price of electricity on the exchange. This means that far less money is needed from the EEG pot to offset the difference between the guaranteed purchase price for green electricity and the actual electricity price. 

However, according to comparison portal Verivox, it is possible that the reduction will make little difference to customers’ bills. With energy prices spiralling across the continent, electricity suppliers are facing higher procurement costs and grid utilisation fees - and some are already passing these extra costs onto consumers. According to Verivox, electricity prices in Germany rose by 9,3 percent in October compared to last year. 

“We therefore assume that electricity prices will remain at their current record level in the coming year, or at least not fall noticeably,” said Thorsten Storck, energy expert at Verivox.