Projected EEG costs up to 2035

The Energiewende – Germany’s transition to a sustainable, efficient energy system dominated by renewable energy – is a long-term project that will span generations. Nevertheless, since being announced, the question “How much will it cost?” has occupied the centre stage of political debate. To help answer the question, in 2013 we developed the EEG Surcharge Calculator, which in just seconds can project specific costs and benefits up to 2018.

To get long-term answers, we asked the Oeko-Institut to expand the capabilities of our software to calculate EEG surcharges as well as many other values through 2035. Such far-reaching projections require many assumptions. A crucial one - for the sake of simplicity - is that Germany’s surcharge system for renewable energy will remain essentially unchanged over this period. Yet within this framework, key parameters such as expansion levels, electricity prices, and electricity use can be varied to represent different future scenarios. Like the original EEG Surcharge Calculator, the new software is available in an expert version and an easy to-use one for decision-makers.

This background paper outlines the essential aspects of a reference scenario estimated by our software. For the period through 2019, the scenario relies on the medium-term forecast from Germany’s transmission network operators. For the period thereafter, the scenario assumes that renewable energy will expand in accordance with the goals of EEG 2014, the latest revision of the German Renewable Energy Act, and that the basic parameters – electricity use, the electricity trading price, regulations governing industry use, exemptions, and in-house electricity use – remain constant. In addition to the reference scenario, this study presents a sensitivity analysis that shows how the EEG surcharge changes with different key parameters.