Germany's upper house of parliament (Bundesrat) should push for a cap on the country's renewable energies law (EEG) levy, the economy minister of industry-heavy North Rhine-Westphalia said today.
State economy minister Garrelt Duin said that following the introduction of a cap on the EEG levy, the tax on power ("eco-tax") should be axed. The EEG levy currently stands at an all-time high of €68.80/MWh ($75.49/MWh) and is paid by power consumers on a pro-rata basis, with exemptions applying to the energy intensive industry.
State economy ministers last November passed a motion tabled by Bavaria's state economy minister Ilse Aigner and supported by Duin, to cap the EEG levy at €65/MWh. Should the costs for feed-in tariffs — to which the levy largely contributes — push the EEG levy beyond the €65/MWh cap, the difference should be paid out of a tax-financed fund, the motion says.
The cap should be introduced as quickly as possible, Duin said today. The Bundesrat has not put the issue on the agenda.
Duin also rejected the EU's stricter rules on nitrogen oxide and mercury emissions, which member states must implement by 2021, following agreement at state level last week. Duin called on European Commission president Jean-Claude Juncker to bring some "coherence" to EU energy policy: the EU recently presented a "re-industrialisation" paper, and "now the other GD [directorate general] does what it wants," Duin said.
The emissions rules would mean the end for Germany's lignite- and coal-fired power plants, according to Czech consortium Leag's general works council chairman Ruediger Siebers. "I do not know whether everyone realises this," Siebers said, adding that economy and energy minister Brigitte Zypries sounded "very surprised" in a talk on Tuesday. Leag operates half of Germany's lignite-fired capacity, with the other half operated by utility RWE.
Duin warned against recurring calls for a rapid phase-out of coal generation in Germany, proponents of which include his counterpart at the state environment ministry, the Green Party's Johannes Remmel. Duin spoke of the days around 24 January this year, when there was very little renewable power in the system. He warned that Germany has not yet phased out nuclear power: "this is still coming," he said. The nuclear phase-out comes on top of other closures, he said: a total of 26GW of fossil-fuel and nuclear capacity will go off-line by 2022: "a quarter of what we need". This compares with a total of 2GW of new capacity under construction. Phasing out coal will mean that Germany will have to "ring up Belgium and tell them we need power", Duin said.
Lignite mining will continue in North Rhine-Westphalia until 2045, Duin affirmed, adding that many do not realise how much Germany depends on industry, which needs stable and affordable power supply.
Duin warned that Germany's power market legislation passed over the past two years has three weak points: it assumes a high share of imported power, which is "problematic". It also assumes an "ambitious" share of demand side management (DSM). And it assumes that future power price spikes on the wholesale power market will refinance necessary investments in generation capacity: this will not happen, Duin said.
Germany will have to introduce a capacity market "immediately after elections", Duin said. The economy and environment ministry has repeatedly said that a capacity market is the wrong way forward. This was reaffirmed by junior minister economy and energy minister Matthias Machnig this week.
Duin also warned against Berlin's plans to harmonise grid access fees, which would raise the fees across the state. North Rhine-Westphalia will not help cover the grid extension costs of other states, Duin said, adding that North Rhine-Westphalia's power consumers already "pay enough for Bavaria's PV [photovoltaic]". Harmonising the high voltage grid access fees throughout Germany could raise the grid costs for some of North Rhine-Westphalia's industry by over 70pc, a study has shown.
But Machnig this week said that if grid access fees are "50pc higher in eastern Germany" then this is clearly a competition issue that needs to be addressed.
North Rhine-Westphalia, which is run by a Social-Democrat (SPD) and Green Party coalition, faces state elections on 14 May.
