Germany: A brake on Altmaier's "electricity price protection"

22. April 2013 | Industry & Suppliers, Markets & Trends | By:  Shamsiah Ali-Oettinger

The German government has made it official: The proposed "strompreisbremse" or electricity price protection as it is loosely translated, will not materialize since both the states and federal government have failed to come to an agreement. The brake on rising electricity prices is not expected until the next elections in September.

The expected brake on rising electricity prices has been put aside for the moment. Nothing is expected to come before the elections.

The German authorities have made it clear over the weekend that the so-called "electricity price protection" introduced by Federal Environment Minister Peter Altmaier will be stalled. This means that the expected brake on rising electricity prices has been put aside for the moment. Nothing is expected to happen before the next elections.

The numerous discussion sessions to bring about the necessary agreement between the federal government and the state governments ended with Chancellor Angela Merkel stating that discussions will continue to May. However, as the local newspaper Handelsblatt reports, she remains reserved about the chances of an agreement.

A reformation of the EEG was called for beginning of the year and Altmaier had already presented his new policy paper with the "electricity price protection" concept that ought to ensure that the EEG levy will not increase by more than 2.5% on a yearly basis until the end of 2014. This would be keeping the levy stable at about 5.3 Euro cents per kWh for renewable energy through 2013 and 2014. Now Altmaier believes that the levy looks set to increase again with the current situation unless counter measures are taken.

The Social Democrats and the Greens want the industries to take bigger responsibility and for renewables to pay less. They are also calling for an electricity tax reduction of 25%, which would relieve consumers of some €1.6 billion. The Green's Jürgen Trittin has said that the failure is indeed good news, saying that the announcement of the plans had already jeopardized investments into renewable energy as local media reports.

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