Study: Up to EUR 187 Billion EEG Induced Extra Costs by 2030?

The EEG surcharge consumers have to pay in support of renewable energy sources will rise further, a study by Ifo Institute for Economic Research on behalf of the Association of Family Businesses (Die Familienunternehmer) concludes. The study calculates EEG related extra costs arising because the European Emissions Trading System (EU ETS) is supplemented in Germany by the EEG that promotes renewable energy sources. Extra costs are in the range of EUR 114 to 187 billion by 2030, not including costs incurred in the past and without saving one additional gramme of CO₂, the study says.

1. Set-up and Findings of the Study

The Ifo study on EEG related additional costs of CO2 reduction compares the costs for two scenarios, a “status quo” scenario and a scenario in which the EEG no longer applies (so-called “Without EEG” scenario), in the period from 2014 to 2030, assuming equal CO2 reductions by the emission trading system. Additional costs for the “status quo” scenario are estimated to range between EUR 114 to 187 billion in the period from 2014 to 2030. This showed that even after the EEG reform that entered into force in August 2014 and amended financial support costs would be rising for businesses and their employees, the Association of Family Businesses said.

2. Recommendations by Association of Family Businesses

They supported the energy policy shift towards a renewable energy supply, but not the EEG, the association declared, saying the EEG had been useful in providing start-up funding for renewables, but was meanwhile counterproductive. The association demanded to strenghthen market mechanisms in what it called “the planned energy economy”, namely the EU ETS.

If Economics and Energy Minister Sigmar Gabriel (SPD) wanted to stick to the EEG he should introduce a technology-neutral auction model based on the principles of a market economy as of 2017, the association recommended.

Please note that by 2017 at the latest the amount of financial support under the new EEG 2014 shall be determined by auctions, including bids of at least 5% of newly installed capacity from European countries under certain conditions, e.g. the principle of reciprocity (cf. Section 2 paras. 5 and 6 EEG 2014; Overview EEG 2014). To this end the EEG will have to further revised.

Source: Association of Family Businesses

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3 Responses to “Study: Up to EUR 187 Billion EEG Induced Extra Costs by 2030?”


  • The below article provides EEG-1 historic costs, and estimates the capital cost for meeting EEG-2 CAPACITY and PRODUCTION targets.

    http://theenergycollective.com/willem-post/338781/high-renewable-energy-costs-damage-germanys-economy

    This section has an estimate of the capital and surcharge costs of the EEG-1 phase; start 2000 – end 2014 (15 years), and EEG-2 phase; start 2015 – end 2030 (16 years). The assumptions take into account the EEG surcharge build-up and wind-down periods of RE systems built during the phases. RE subsidies are for 20 years.

    EEG – 1

    The total EEG-1 surcharges on electric bills increased from zero at start of 2000 to about 24.5 b euro in 2014, will be decreasing to zero by end of 2034.

    Costs During the EEG-1 Build-up and Wind-down Period:

    Surcharge during build-up from start 2000 to end 2014, b euro…………….111.6
    Surcharge during wind-down from start 2015 to end 2034, b euro…………275.8
    Total surcharge, b euro……………………………………………………………………387.4

    200.1 b euro capital cost to build the RE systems, which typically last only 20 to 25 years!!

    Costs, such as grid build-outs, capacity adequacy, balancing losses, etc., are not included.

    EEG – 2

    The total EEG-2 surcharges on electric bills increased from zero at start of 2015 to about 11.7 b euro in 2030, will be decreasing to zero by end of 2050.

    Costs During the EEG-2 Build-up and Wind-down Period:

    Surcharge during build-up from start 2015 to end 2030, b euro………………102.3
    Surcharge during wind-down from start 2031 to end 2050, b euro…………..111.0
    Total surcharge, b euro……………………………………………………………………..213.2

    243.0 b euro capital cost to build the RE systems, which typically last only 20 – 25 years!!

    Costs, such as grid build-outs, capacity adequacy, balancing losses, etc., are not included.

    NOTES:
    – RE systems installed at the start of 2000 receive feed-in rates to the end of 2019, i.e., for 20 years, etc.
    – (EEG-1 + EEG-2) surcharge peaks at about 25.68 b euro during 2019, will be decreasing to zero by end of 2050.

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