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Shortfall of 8.8 billion euros reported in government funds for green electricity incentives.

Following the elimination of the Electricity levy burden

Lower electricity prices on the stock exchange are driving up costs for the federal government.
Lower electricity prices on the stock exchange are driving up costs for the federal government.

Shortfall of 8.8 billion euros reported in government funds for green electricity incentives.

To subsidize renewable energy generation, photovoltaic and wind power plant operators receive fixed prices. This has led to more cash inflow than anticipated due to cheaper prices at the power market. Previously, consumers covered the discrepancy between expenses and earnings through the Renewable Energy Sources Act (EEG) levy. The levy was eliminated, and the funds are now sourced from the federal budget. This substantial extra need is mostly due to the drastically reduced prices at the power market. Since photovoltaic and wind power plant operators receive higher guaranteed prices, the federal government must cover the remainder.

The Federal Government faces paying out billions in costs related to renewable energy promotion. As State Secretary Florian Toncar wrote to the Chair of the Budget Committee of the German Bundestag, Helge Braun, this amounts to nearly nine billion Euros. The Economic Ministry had requested an overspending of 8.769 billion Euros.

The gap between expenses and earnings used to be covered by consumers through the EEG levy. This practice was discontinued, and the funds are instead drawn from the federal budget. The massive additional requirement is primarily due to the dramatically decreased prices at the power market. Since photovoltaic and wind power plant operators receive guaranteed higher prices, the federal government must bridge the gap.

An initial allocation of 10.6 billion Euros was earmarked for funding under the Renewable Energy Sources Act (EEG) by 2024. Toncar's letter suggests that the significantly reduced power market prices and the resulting high financing demands were not anticipated at the time of the budget approval in 2024. The government relied on calculations from the transmission system operators from late 2023. As it stands now, the funds on the EEG account are almost depleted.

CDU energy politician Andreas Jung stated, "The magnitude of this cost burden from taking over EEG payments was foreseeable. Instead of taking preventive measures, the traffic light coalition manipulated the numbers and diverted the supposedly earmarked CO2 revenues elsewhere."

The Federal Ministry of Finance has considered the possibility of a supplementary budget for this year. Due to weaker-than-expected economic growth in Germany, the cyclical component in the debt brake allows for a larger net credit take-up. This could reach up to eleven billion Euros. Initially, a net credit take-up of 39 billion Euros was planned for the current year within the constraints of the debt brake.

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The Renewable Energies Act (EEG) levy, which previously covered the gap between expenses and earnings for renewable energy generation, has been eliminated and replaced with funds drawn from the federal budget. This shift is largely due to the significant decrease in electricity prices at the power market. Under the Federal Ministry of Economics' oversight, photovoltaic and wind power plant operators now receive guaranteed higher prices, leading to a substantial need for the federal government to cover the remaining costs.

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