Railroad Operators: Changes to Reductions of Renewables Surcharge May Negatively Affect Fares

Information concerning a reform of the renewable surcharge reduction for railroad operators as part of the planned reform of the Renewable Energy Sources Act (EEG), have drawn sharp criticism from the Association of German Transport Companies (VDV). The proposal would lead to additional costs of approximately EUR 150 million in 2018 and might lead to rising ticket prices, VDV warned.

To rein in the surging costs of support for renewable energy and with regard to a state aid investigation opened by the European Commission last year into renewable surcharge reductions for energy-intensive companies and railroad operators, Germany is in the process of preparing a reform. A first draft bill is meanwhile available also on the internet.

While the part concerning changes to the renewable energy surcharge reduction for energy-intensive companies (Section 41 EEG) has been left open due to ongoing discussions with the Commission, a new Section 42 EEG affecting railroad operators is already contained in the draft.

On the one hand the new Section 42 EEG lowers the eligibility criteria for obtaining a reduction of the renewable surcharge (EEG surcharge) from a consumption of more than 10 GW to more than 3 GW (for an English version of the currently applicable Section 42 EEG, please click here). On the other hand, the EEG surcharge for operators with a consumption exceeding the threshold shall (only) be reduced as follows:

  • to 15% of the EEG surcharge for 2015;
  • to 20%  of the EEG surcharge for 2016;
  • to 25%  of the EEG surcharge for 2017;
  • to 30%  of the EEG surcharge for 2018.

With a medium term forecast by the transmission system operators of an EEG surcharge ranging from 5.85 to 6,86 ct/kWh in 2015, railroad operators would have to pay between 0.88 to 1.03 ct/kWh. Presently railroad operators with a consumption exceeding 10 GW can apply for a reduction of the EEG surcharge to 0.05 ct/kWh for 90% of electricity purchased or used by themselves.

According to VDV, their calculation of additional costs of EUR 150 million in 2018 already includes EEG surcharge reductions in the amount of roughly EUR 3 million for smaller operators. The association points out that rising costs might lead to higher fares, criticizing that this would affect citizens and enterprises that were using an environment-friendly and energy-efficient means of transportation.

VDV also points out that the plans to make power generated by a plant operator and consumed by himself contribute more to the costs for grid expansion would lead to further costs of a hitherto unknown amount. Under the current EEG self-consumed power is privileged insofar that an EEG surcharge does not apply (cf. Section 37 para. 3 sent. 2;  regarding the planned changes, please see our first information here).

Source: VDV

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