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17 September 2015

Wholesale power prices fall, renewables surcharge to rise – each by 0.3 cents per kilowatt-hour

Electricity bills should remain steady in 2016 if power companies make fair calculations

Electricity has become much cheaper on the power market in the last 12 months. The wholesale price of power for delivery in 2016 is expected have fallen by only 3.25 cents per kilowatt-hour (kWh) on a 12-month average (October 2014-September 2015). That is a decline of nine percent, or 0.32 cents per kWh, over the previous year. As a consequence, the renewables (EEG) surcharge added to consumers’ power bills, which helps finance Germany’s green energy expansion, will rise slightly, to between 6.4 and 6.6 cents per kWh from 6.17 cents now. When the wholesale price falls, the surcharge rises to make up the difference between the market price and a higher, state-guaranteed, renewables tariff. This ‘feed-in tariff’ is paid to renewable energy companies to incentivise investment.

“The renewables surcharge rises to the same degree as wholesale prices decline,” said Dr. Patrick Graichen, director of Agora Energiewende. “This means power consumers will not have to pay more than today if utilities make an honest calculation. But consumers will get more renewable energy for their money: While around 30 percent of all power this year will come from wind and solar power, this should rise to between 32 and 33 percent in 2016.”

The outlook for the EEG surcharge was made after updating the software“EEG Calculator” with the latest power market data. The calculator (in German language) can be found online here. The calculator allows anyone who uses it to change the size of the EEG surcharge in order to determine the effects of various scenarios between now and 2035.

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