German Power Price Increases Could Crimp Merkel’s Plans

(Bloomberg) -- Chancellor Angela Merkel’s move to ease the burden of new climate charges on heating and transport by lowering retail power costs just got its first reality check.

Green-energy levies attached to electricity bills are set to rise, pushing up consumer power prices 5% to 6.76 euro cents (7.43 cents) a kilowatt hour next year, the nation’s grid operators said on Tuesday. The move to lift the charge for the first time since 2017 could be a setback to Merkel’s sweeping plans to cut carbon emissions without hurting consumers.

The government has pledged to push down electricity costs to offset steps to apply a cap-and-trade system to greenhouse emissions from transport and heating -- costs that oil and gas companies will pass to consumers. Germany and neighboring Denmark already share among the highest power bills in the European Union.

Merkel’s Climate Protection Program 2030 envisaged alleviating the price of retail power, including tapping revenue from selling heating and transport pollution permits to offset a reduction in the green surcharge. Taxes and levies make up about 53% of power’s cost -- burdens that are far too high as Merkel moves forward with her revamp of climate protection, the BDEW utilities lobby said Tuesday.

To contact the reporter on this story: Brian Parkin in Berlin at bparkin@bloomberg.net

To contact the editors responsible for this story: Reed Landberg at landberg@bloomberg.net, Jonathan Tirone, Andrew Reierson

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