EEG 2.0: Ministerial Draft on Special Equalisation Scheme for EEG Surcharge Regime for Energy-intensive Companies

A ministerial draft (Referentenentwurf)  has been released for the special equalisation scheme for energy intensive companies. The special equalization scheme (besondere Ausgleichsregelung) in the Renewable Energy Sources Act (EEG) provides for a reductions of the renewables surcharge (EEG surcharge) for energy-intensive companies. The Federal Government is scheduled to decide about the bill on Wednesday.

The ministerial draft complements the bill amending the EEG (EEG 2014) adopted by the government on 8 April 2014 which did not yet contain stipulations regarding EEG reductions. As the EU Commission had opened an in-depth investigation into the current EEG reduction scheme for alleged violation of EU state-aid rules last year, the government had waited for the publication of the Commission’s state aid guidelines for assessing public support projects in the field of energy and the environment for the period 2014 to 2020 on 9 April 2014. Below please find an initial summary of aspects of the special equalization scheme reducing the EEG surcharge as laid down in Sections 60 to 65 EEG 2014. Section 99 EEG 2014 contains grandfathering clauses.

  • In line with the EU guidelines, eligible undertakings are those exposed to a risk to their competitive position due to the costs resulting from the EEG in support of renewable energy (i.e. the EEG surcharge). They are listed in Annex 4 as list 1 and list 2 companies
  • Undertakings can apply for an EEG surcharge reduction if the ratio of electricity costs to gross value added at factor costs amounts to
    • 16% for list 1 undertakings (as of 2015: 17%)
    • 20% for list 2 undertakings
    • The draft bill points out that the threshold has been moderately increased compared with the EEG 2012 to reflect the increases of the EEG surcharge in the last two years and the resulting electro-intensity for privileged companies. By raising the threshold the government wants to avoid increasing the number of eligible companies.
  • EEG surcharge costs are reduced as follows:
    • The EEG surcharge has to be paid in full for the first 1 GWh (presently 6.24 ct/kWh).
    • For consumption exceeding 1 GWh, the EEG surcharge amounts to 15%, with at cap at 4% of gross value added (GVA) if the electro-intensity (electricity costs divided by undertaking’s gross value added) of an undertaking amounts to less than 20%. A cap at 0.5% of GVA applies if the respective electro-intensity is higher than 20%. These reductions for consumption exceeding 1 GWh only apply to the extent that the individual EEG surcharge payable is no less than 0.1 ct/kWh (cf. Section 61 para. 2 EEG 2014). This minimum EEG surcharge shall ensure a minimum contribution to the EEG surcharges by privileged undertakings.
  • The new system generally applies as of 2014 for applications for EEG surcharge reductions in 2015 and later years. However, the new scheme is introduced gradually. For undertakings currently benefiting from the more generous reductions under the EEG 2012, the EEG surcharge may not increase to more than twice as much as the surcharge in the previous year in the period from 2015 to 2018 (cf. 99 para. 3 EEG 2014).
  • To facilitate the system change, transitional provisions shall apply, one of which is a prolonged application period until 30 September 2014 for 2015.
  • A hardship clause, which is unlimited in time, applies to undertakings that were granted EEG surcharge reductions in 2014, but which will no longer be eligible under the EEG 2014.  They will have to pay the EEG surcharge in full for the first 1 GWh. Beyond 1 GWh they have to pay 20% of the EEG surcharge with no further reduction. The clause applies in the following three cases:
    • Undertakings not listed in Annex 4;
    • Undertakings covered by Annex 4, list 1 whose electro-intensity amounts to 14% (the previous threshold), but not to 16% respectively 17% of GVA;
    • Undertakings covered by Annex 4, list 2 whose electro-intensity does not amount to 20% of GVA.
If the Cabinet approves the draft on Wednesday, it will join the parliamentary procedure for the EEG 2014 revision.

Source: Referentenentwurf BMWi

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