Relief Measures: Green Subsidies May Be First To Go As German Minister Calls For Suspension Feed-In Tariffs

Make no mistake about it.

The draconian measures implemented to cub the so-called COVID-19 “pandemic” are having a profound impact on the German economy as millions of self-employed have seen business wiped out, and even large industries such as Mercedes, VW and BMW are halting production.

Even worse is the unprecedented (postwar) degree of uncertainty that now looms. How long are the strict measures going to stay in place?

Will the economy be able to rebound? Where’s the money to pay for it all going to come from? How do we get relief to the citizens? Not since WWII has Germany been confronted with such monumental challenges.

Suspend green energy feed-in tariffs

One place to start for providing relief, says Bavaria Minister President Markus Söder, is a suspension of the punishing EEG levy and electricity tax, which have made electricity rates in Germany among the world’s highest. reports pv magazine.

Source: Statista

Minister President Söder is calling for rapid and extensive aid from the Federal Government to keep the economy crashing.

In a speech in the State Parliament in Munich yesterday, Söder called on the Federal Government to come up with a rapid and comprehensive federal aid package for industry, saying 100 to 150 billion euros were needed.

“Among other things, he called for the suspension of the electricity tax and EEG levy. This would help many companies and private households,” reported the online German pv magazine.

23.9 billion euros just for feed-in levies

Currently German consumers and industry are paying over €20 billion annually in mandatory feed-in tariffs for renewable energies such as wind and solar.

“For 2020 they expect to pay a total levy of 23.9 billion euros,”German business daily Handelsblatt reported here recently. “For an average household with an annual consumption of 3,500 kilowatt hours, the burden of the EEG levy will amount to 280 euros including VAT next year.

“The EEG levy is currently 6.756 cents per kilowatt hour and the electricity tax is 2.05 cents per kilowatt hour,” reports py magazines. “Given average electricity prices of currently more than 30 cents per kilowatt hour for private households. Commercial and industrial customers currently pay an average electricity price of around 18.55 cents per kilowatt hour.”

Compared to the USA, German electricity rates for industry (2016) are nearly double. Source: Clean Energy Wire

Suspending the green energy feed-in tariffs would be one step in the right direction, among many, to unbureaucratically and effectively provide quick relief to consumers – and the industries that employ them.

5 responses to “Relief Measures: Green Subsidies May Be First To Go As German Minister Calls For Suspension Feed-In Tariffs”

  1. Alan Tomalty (@ATomalty)

    Get rid of all subsidies and any special rules for solar and wind.

  2. RickWill

    People not getting any regular income will need a lot more than a small reduction in electricity cost.

    The ECB will need to show that it is prepared to supply all necessary funds to ensure people are housed, fed and cared for if needed. There will be stress on some parts of the supply chain for essentials in the circumstances but they should not be insurmountable. There may need to be some transfer of people from industries underemployed, like car makers, to industries under pressure like health care. In Australia, airport baggage handlers have been offer jobs stacking supermarket shelves; both require basic level of fitness and willingness to work shiftwork.

    The world needs to take about a month off to prevent the rapid spread.

    All banks in Australia have given notice that anyone who has lost income due to circumstances involving CV-19 can defer mortgage payments for 3 months initially and at least another 3 months upon a second review. The Australian RBA has begun quantitative easing; something it has never done before.

    Since the GFC, the world broadly has a better understanding of money supply. QE is very effective in a highly deflationary environment. Normally viable businesses need to be put in limbo rather than terminated. Economies need to be socialist in outlook until the CV-19 risk diminishes and people can move around as normal.

    Be thankful for the lack of Extension Rebellion marches and plane loads of do-gooders arriving at resorts to discuss the Paris Accord.

  3. Jim

    Another part not mentioned. When has a utility cut prices to reflect cheaper production costs? It is usually tacked onto the current price structure, added, not subtracted.

  4. raygun

    I can see Gretta Ts rabid “How Dare You”, now. ‘The’ virus just up-staged her global dominance.

  5. Alasdair Fairbairn

    This sort of decision should be high on the agenda at the next COBRA meeting here in the U.K.

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