At the peak of the energy crisis in Europe, Germany decided to remove the “EEG-Umlage” from the electricity tariffs. The EEG was a major component and was paid by consumers to finance renewables expansion.

The component was around 60 to 70 €/MWh, corresponding to around 20% for households and more than a third for industries.

With the cannibalization effect of renewables (decreasing market value of renewables, see my post here: gemenergyanalytics.substack.com/p/solar…) and the generous subsidies to renewables, especially for rooftop solar (up to 130 €/MWh), it is certain that large subsidies would be needed.

With the removal of the EEG, this subsidy has simply been transferred from the electricity consumers to the taxpayers, as the financing needs are taken over by the governmental budget.

When comparing German electricity prices of today with the ones before the crisis, we should keep in mind that this major subsidy has been removed to reduce the burden of support to renewables. From the official website: “The Bundestag has now passed the law reducing the cost burden of the Renewable Energy Sources Act levy”.

Reference: bundesregierung.de/breg-en/news/renewab…