The German government is reportedly planning a new levy on all electricity consumers, triggered by the activation of reserve power plants. This development, revealed in a response to a written inquiry from Green Party politician Michael Kellner to the Federal Ministry for Economic Affairs and Climate Action, is detailed in a report by POLITICO’s “Industry & Trade” newsletter.
The move is driven by European Union state aid law, which necessitates a principle of “polluter pays” when implementing a capacity market. Current plans, spearheaded by Federal Minister for Economic Affairs and Climate Action, Katharina Reiche (CDU), involve tendering for gas-fired power plants totaling up to 20 gigawatts to serve as reserve capacity by 2030. To ensure the financial viability of these power plants for operators, a capacity mechanism is being developed. This mechanism will compensate energy companies solely for the provision of reserve power, regardless of whether it’s actually consumed.
The government intends to introduce a comprehensive capacity mechanism following the tenders for its revised power plant strategy. This system aims to incentivize power plants to be available during periods of low demand and peak price volatility.
Michael Kellner criticized the government’s approach, highlighting the potential financial burden. He stated that the plans represent a significant cost, with the levy impacting the industrial sector. While the exact amount of the surcharge remains unspecified, Kellner accused the government of withholding information despite the existence of calculations from a previous legislative period.
Initial concepts for a capacity market were previously explored under the tenure of Robert Habeck (Green Party), Habeck’s predecessor. At that time, the coalition government projected a minimum cost of two cents per kilowatt-hour for a central capacity mechanism. Minister Reiche has indicated that first tenders will be launched this year.
