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Lindner and Habeck plan electricity market reform: switch off "profit autopilot".

2022-08-29T03:17:21.285Z


Lindner and Habeck plan electricity market reform: switch off "profit autopilot". Created: 08/29/2022 05:07 Robert Habeck and Christian Lindner. © dpa The high gas prices also have an impact on the price of electricity. This is increasingly burdening private households and companies. Robert Habeck and Christian Lindner want a reform of the electricity market. Berlin - Federal Finance Minister


Lindner and Habeck plan electricity market reform: switch off "profit autopilot".

Created: 08/29/2022 05:07

Robert Habeck and Christian Lindner.

© dpa

The high gas prices also have an impact on the price of electricity.

This is increasingly burdening private households and companies.

Robert Habeck and Christian Lindner want a reform of the electricity market.

Berlin - Federal Finance Minister Christian Lindner (FDP) wants to accelerate the reform of the electricity market.

"The federal government must address electricity prices with the utmost urgency," said the FDP chairman of the

picture on Sunday.

Otherwise "inflation will be driven more and more by an electricity crisis". 

Lindner criticized the sharp increase in profits for the operators of wind turbines, solar systems and coal-fired power plants: "Politics have set up a profit autopilot on the electricity market." Due to the applicable rules, producers of solar, wind or coal-fired power would automatically be paid as if they had bought expensive gas.

"Profits are increasing billion by billion at the expense of consumers."

Reform of the electricity market: lower prices for consumers and industry

Federal Economics Minister Robert Habeck (Greens) wants to lower prices for consumers and industry with a fundamental reform of the electricity market.

The aim is to decouple the development of end customer prices for electricity from the rising gas price.

In view of the sharp rise in energy prices, medium-sized companies are demanding a protective shield for companies.

Similar to the corona pandemic, a hardship fund is necessary for companies that have been hit particularly hard by the energy price and are no longer internationally competitive, said Markus Jerger, federal director of the Federal Association of Small and Medium-Sized Businesses, of the German Press Agency in Berlin.

"Even the strongest economy cannot withstand the doubling or tripling of energy prices."

Increased electricity prices: Industry is curbing production

The deputy director of the DIHK, Achim Dercks, pointed out in the

editorial network Germany

(RND) that a “frighteningly high number of companies, especially in industry” were forced to react to the high energy prices by reducing production or even shutting down. 

SME representative Jerger said many companies could not pass on rising energy prices to customers.

The electricity tax must fall to the minimum permissible in Europe.

As with gas, VAT should also be reduced from 19 to 7 percent for electricity.

In addition, an industrial electricity price tariff is necessary.

Excess profit effects on the electricity market: pass on profits to end customers

From the point of view of the credit agency Creditreform, the rise in energy prices will also significantly worsen the economic situation for many private households.

Creditreform economist Patrik-Ludwig Hantzsch told the

Handelsblatt

: "The additional burdens are already serious." Rising inflation will exacerbate the overindebtedness significantly. 

According to his ministry, Habeck wants to achieve with the intended electricity market reform that customers benefit more from the cheap renewable energies on their electricity bill.

To this end, the resulting excess profit effects in the electricity market, which arise from the so-called merit order for power plants with very low production costs, are to be addressed.

These excessive profits should therefore be passed on to the end customers.

Reform of the merit order: integration of European partners necessary

However, according to the Ministry of Economic Affairs, the functionality of the European electricity market and the secure supply of electricity should remain guaranteed.

Pricing based on marginal costs in the European wholesale market itself should not be changed.

The merit order would remain, but the problematic effects would be changed.

Such a reform is complex, and the European partners must also be involved.

In the short term, the focus will therefore continue to be on an excess profit tax and timely relief for consumers and aid programs for the economy.

The merit order is the order in which the power plants that are offered on the electricity exchange are used.

Power plants that produce electricity cheaply are used first to meet demand.

Such as wind turbines.

In the end, however, the price depends on the power plant that was switched on last and is therefore the most expensive, in order to cover the demand - these are currently gas-fired power plants due to the high gas prices.

As a result, electricity prices have also risen significantly.

(at/dpa)

Source: merkur

All news articles on 2022-08-29

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