Who is supposed to finance the whole thing?
Posted: Sat Jan 25, 2025 9:31 am
The relief for households and industry through the electricity price cap is refinanced by skimming off so-called windfall profits (surplus revenues) in the electricity market. The currently high electricity prices, which are currently leading to very high windfall profits, are a result of the electricity market design. According to this design, the price for all types of electricity generation is determined by the power plant with the highest marginal costs required for the current electricity generation (“ merit order effect ”). These are currently gas-fired power plants, whose marginal costs depend on the sharp rise in gas prices. For all other types of electricity generation, however, production costs have not increased, which means that the vast majority of unexpected additional income (“windfall profits”) is currently being generated. The electricity price cap skims off such very high windfall profits for a limited time and redistributes them to households and companies. Producers of renewable energy in particular have recently benefited from the high prices on the stock exchange.
The levy took effect from December 1, 2022. The term of the levy uruguay consumer email list is initially limited to June 30, 2023, but can be extended at a later date by legal order, but no later than April 30, 2024.
What are the reactions?
Although the Association of the German Automotive Industry (VDA) and the Central Association of German Crafts (ZDH) have praised the plan because energy-intensive small craft businesses will also benefit from the electricity price cap, the environmental organization Greenpeace has criticized the plan. It sees the resolutions as an artificial reduction in the price of energy and a failure to ensure that dependence on fossil fuels is reduced in the future.
Since the electricity price cap is to be financed by skimming off windfall profits, wind, solar and bioenergy producers see this as a threat to their livelihoods and fear that urgently needed investments in the energy transition will be held back. This is because the skimming is to be calculated, among other things, based on the prices on the spot market, on which electricity that can be delivered at short notice is traded. However, the spot market prices are often significantly higher than the prices agreed between the operator and seller.
The levy took effect from December 1, 2022. The term of the levy uruguay consumer email list is initially limited to June 30, 2023, but can be extended at a later date by legal order, but no later than April 30, 2024.
What are the reactions?
Although the Association of the German Automotive Industry (VDA) and the Central Association of German Crafts (ZDH) have praised the plan because energy-intensive small craft businesses will also benefit from the electricity price cap, the environmental organization Greenpeace has criticized the plan. It sees the resolutions as an artificial reduction in the price of energy and a failure to ensure that dependence on fossil fuels is reduced in the future.
Since the electricity price cap is to be financed by skimming off windfall profits, wind, solar and bioenergy producers see this as a threat to their livelihoods and fear that urgently needed investments in the energy transition will be held back. This is because the skimming is to be calculated, among other things, based on the prices on the spot market, on which electricity that can be delivered at short notice is traded. However, the spot market prices are often significantly higher than the prices agreed between the operator and seller.