RWTH Researchers Publish Study With Reform Proposals for EEG Levy

07/12/2021

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Aaron Praktiknjo

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Credits for low-income households.

 

Germany wants to contribute to the reduction of greenhouse gas emissions with the energy transition. The expansion of renewable energies is financed by the EEG levy on the electricity price paid by final energy consumers in particular. This levy, named after the Renewable Energy Sources Act, is the same for all households. In a European comparison, German households pay the highest electricity prices, which averaged 17.19 cents per kilowatt-hour in 2003 and 31.94 cents this year.

A study by the Chair for Energy System Economics at RWTH has now come to the conclusion that the EEG levy poses a major challenge for low-income households. "It has been extremely effective in the success of the energy transition so far. However, we have measured its significant negative effect on the Gini coefficient, which depicts the gap between low-income and high-income households. In Germany, around 40,000 additional households fall below the poverty risk threshold as a result of the income-independent EEG levy," explains Professor Aaron Praktiknjo, Chair of Energy System Economics.

In the meantime, the new “traffic light” coalition is planning to abolish the EEG levy from 2023. However, the RWTH researchers are proposing an alternative reform of the EEG levy, which would see the levy initially increase for all households. In return, households would receive a certain credit amount depending on their income. According to the calculations, lower-income households would spend less on electricity overall, while the expenditures for higher-income households would be higher with the energy transition. "Around 30,000 fewer households would be below the poverty risk threshold under our proposal compared to the planned abolition of the EEG levy. The additional capital available via the credit could be invested in more energy-efficient appliances," says Jan Priesmann, research associate at the Chair of Energy System Economics.

The study is available as a preprint.