Government Considers New Electricity Levy Amid Rising Costs

Berlin - The federal government is reportedly contemplating the introduction of a new levy on electricity, which could lead to increased energy prices for consumers. This information comes from a recent report by Politico, citing a response from the Ministry of Economic Affairs to a written inquiry by the Green Party.

The proposed levy is linked to the establishment of a reserve of gas power plants. Economic Minister Katherina Reiche has indicated plans to allocate a total capacity of 20 gigawatts by 2030. These gas power plants are intended to provide backup energy during periods when conventional power plants cannot meet demand, such as during low wind or solar generation, or when market prices surge.

Under the current proposal, the operators of these gas plants would be compensated solely for maintaining this reserve, funded through the new electricity levy that would burden all electricity consumers.

Details regarding the exact financial impact of this levy remain unclear. Previous discussions on similar capacity markets, notably during the tenure of former Economic Minister Robert Habeck, suggested potential increases of at least two cents per kilowatt-hour.

Michael Kellner, a Green Party economic politician who served as parliamentary secretary under Habeck, expressed concerns about the anticipated costs, indicating that it is evident the plans by Minister Reiche will impose significant expenses, particularly on industry.

If the levy is implemented, it would signify a further breach of electricity pricing promises by the black-red coalition government led by Chancellor Friedrich Merz. The coalition previously pledged to reduce electricity prices, specifically stating in their coalition agreement that the electricity tax would be lowered for all consumers. However, this reduction was primarily applied to industries and agriculture, leaving many consumers and small businesses facing higher costs.

This potential new levy comes amidst ongoing discussions about financial management and energy strategies in Germany, as the government seeks ways to balance energy security with economic viability.