EEG Surcharge for 2011 Too High?

According to the energy information service energate, the Federal Ministry for the Environment (BMU) believes that based on current figures transmission system operators (TSOs) may have set the EEG reallocation charge for 2011 too high. The TSOs had to decide last October, based on forecasts available at that time.

The German Renewable Energy Sources Act (Erneuerbare Energien Gesetz – EEG) promotes renewable energy by stipulating feed-in tariffs that grid operators must pay for renewable energy fed into the power grid. Ultimately, the electricity consumers have to bear the difference between the market price and the feed-in tariffs by paying an EEG reallocation charge (EEG-Umlage, also called EEG surcharge).

Pursuant to Section 3 para 2 Equalisation Scheme Ordinance (Verordnung zur Weiterentwicklung des bundesweiten Ausgleichsmechanismus – AusglMechV) TSOs have to publish the EEG reallocation charge for the following year by 15 October of the respective calendar year. Mainly due to the sharp increase in PV generation capacity over the last years, the TSOs announced an increase of the charge from 2.047 Cent/kWh in 2010 to 3.53 Cent/kWh in 2011. At the time, estimates for additional solar capacities in 2010 ranged from over 6 GW to above 10 GW. The transmission operators assumed that 19,399 MW would be installed by the end of 2010. This would have been an increase of 9.5 GW (PV capacity in 2009: 9.9 MW).

According to the February figures from the Federal Network Agency, the frist 11 months of 2010 saw additional PV capacities of 6.2 MW. The December figures have not yet been published. The Environment Ministry believes roughly 7 MW have been newly installed, energate says. This would reportedly lead to a 0.8 Cent/kWh lower EEG surcharge of 2.7 Cent/kWh.

The announcement of the reallocation charge of 3.53 Cent/kWh for 2011 was widely reported. In the wake of it, many utilities raised their prices. Meanwhile, additional solar feed-in tariffs cuts beyond the yearly degression have been adopted by the German Bundestag (parliament) for 2011. They are scheduled for 1 July respectively 1 September for freestanding installations.

The four German TSOs Amprion, 50hertz, Tennet and EnBW Transportnetz published a joint press release, pointing out that the 2011 EEG reallocation charge forecast was made in cooperation with external consultants, with the Federal Network Agency and the Environment Ministry being involved in the process.

The increase of 1.5 Cent/kWh over the 2010 charge included a compensation of 0.29 Cent/kWh for 2010, as the 2010 charge was too low, the press release says. Should the 2011 charge be too high, the surplus plus interest would be offset against the 2012/2013 charge.

It remains to be seen to what the new 2010 PV capacity amounted to. With the exception of June 2010 (2,108.905 MWp, i.e. before the July reduction), newly installed capacity ranged from 163.280 MWp in February to 663.064 MWp in July. Depending on the December figures, additional PV capacity for 2010 may end up to be below the 9.5 GW forecast. The development of the EEG surcharge is an important element of political discussions about the cost of renewable energy in Germany.

Sources: energate, Amprion

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