Skimming off random profits: electricity industry should pay from December

Status: 11/25/2022 5:34 p.m

Energy associations were up in arms and threatened lawsuits. Now the federal government has toned down its plans. Excess profits from electricity producers are skimmed off later and not for as long.

The planned siphoning off of so-called random profits from the electricity producers is to start later – only from December instead of retrospectively from September. The Federal Cabinet approved the changed plans, as announced by the Federal Ministry of Economics.

The government would thus respond to demands from the energy industry, which had criticized a retrospective levy as unconstitutional and distorting competition.

Skimming off until April 2024 instead of until the end of 2024

In addition, the fee should only be levied until April 30, 2024, the date on which the electricity price brake ends. According to the original draft law, it should be paid off by the end of 2024. According to estimates, the changes mean a billion euros less for the state.

The federal government wants to skim off the proceeds from almost all technologies, including the green electricity sector. Their production costs have risen significantly less than the price of electricity for consumers. It depends indirectly on the gas price, which in turn has risen extremely sharply. This results in high extra profits for power generators.

Producers are allowed to keep base proceeds

Each type of generation such as wind, solar, lignite or nuclear energy is granted a certain amount of revenue as a basis. Everything that is achieved above that should be skimmed off to 90 percent.

The money, which is expected to total an amount in the double-digit billions, is to be used to finance the electricity price premium for households and industry. The Federal Cabinet has now launched the gas and electricity price brake. The Bundestag and Bundesrat will then vote on it in December.

Broad criticism from energy associations

Energy associations and suppliers had opposed the government’s original plans. The draft law violates EU law and violates the property guarantee, said the Hamburg energy supplier Lichtblick on Thursday, citing a commissioned legal opinion.

“The planned skimming mechanism will lead to far-reaching distortions in the German electricity market,” it said. The consequences of these developments are rising electricity prices for consumers, an obstacle to the further expansion of renewable energy plants and, in individual cases, the insolvency of plant operators.

The President of the Federal Association of Renewable Energies, Simone Peter, told the dpa news agency, especially with regard to a retrospective levy: “There are considerable constitutional and European law concerns.” The association promised a wave of lawsuits. The federal government should choose a simple tax solution for legal reasons alone.

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