The German government is reportedly planning a new levy on all electricity consumers, set to take effect once reserve power plants are activated. This development stems from the Ministry for Economic Affairs’ response to a written inquiry from Green Party politician Michael Kellner, as detailed in a report by POLITICO’s “Industry & Commerce” newsletter.
According to the response, adherence to EU state aid law necessitates a “charge-based refinancing” in the event of a capacity market. The move comes as Minister for Economic Affairs, Katheine Reiche, proposes to auction off natural gas power plants with a combined output capacity of up to 20 gigawatts by 2030, intended to function as reserves. To ensure the financial viability of these plants for operators, a capacity mechanism is planned, compensating energy companies solely for providing the reserve.
The government’s response confirms the intention to introduce a comprehensive capacity mechanism aligned with the auctioning of plants outlined in the updated power plant strategy.
Kellner has voiced concerns regarding the potential cost implications of Reiche’s plan, stating the response confirms that industry will bear a portion of the expense. While the government has not yet disclosed the exact amount of the levy, Kellner criticizes the lack of transparency, alleging that internal calculations likely exist from prior administrations.
Early designs for a capacity market were initially explored under the tenure of Reiche’s predecessor, Robert Habeck. During that period, Kellner held the position of State Secretary at the Ministry for Economic Affairs and projections indicated a potential market charge of at least two cents per kilowatt-hour. The intended role of the new power plants is to operate during periods of low demand and at times of peak pricing. Reiche has indicated that initial auctions are expected to commence this year.