The Effect of the German Renewable Energy Act (EEG) on "the Electricity Price"

Arbeitspapier

Many technologies that produce electricity from renewable energy sources are currently not competitive. This is due to the fact that their generation cost is higher than that of conventional thermal power plants. Nevertheless, since using renewable energies has a number of positive effects, these installations have been supported by German public policy for many years. This support is currently demonstrated very successfully by the German Renewable Energy Act (EEG), which provides for fixed feed-in tariffs (FITs). The costs of this support scheme are distributed to the electricity consumers. Due to the so-called EEG levy, electricity costs of industry are increased and as a result their competitiveness is decreased. Consequently, electricity intensive enterprises have protested against the levy on a regular basis and finally achieved a reduction of the levy. However, the potential effect of the EEG on the wholesale price for ele ctricity has not yet been considered. Against this background, we analyze the effect of the EEG on electricity prices in a perfect market. We will show that the support of electricity production from renewable energy decreases the wholesale price of electricity. Consequently, electricity costs of companies that are subject to the reduced EEG levy may decrease too.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: HWWA Discussion Paper ; No. 358

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Renewable Resources and Conservation: Government Policy ; Electric Utilities ; Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies ; Energy: Demand and Supply; Prices
• Thema: Renewable Energy Act ; EEG levy

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Bode, Sven ; Groscurth, Helmuth-Michael
• Ereignis: Veröffentlichung
• (wer): Hamburg Institute of International Economics (HWWA)
• (wo): Hamburg
• (wann): 2006

Weitere Informationen

• Handle: http://hdl.handle.net/10419/19388
• Letzte Aktualisierung: 10.03.2025, 11:42 MEZ