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German renewables levy to rise 3% to record Eur63.54/MWh for 2016

London — * Renewables support to cost a total Eur23 billion for 2016
* Renewables output estimated to reach 176 TWh for 2016

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German electricity consumers next year will have to pay 3% more for subsidies paid to renewable power producers as output from wind, solar and other renewables is estimated to rise by 9%, the four power grid operators said in a statement Thursday.

The so-called "EEG-Umlage" or renewable energy surcharge for 2016 will be 6.354 euro cent/KWh (Eur63.54/MWh; $72.70/MWh), it said.

Last year, the levy fell for the first time since it was introduced, after tripling in the years between 2010 and 2014 as the falling of solar system saw a massive boom in PV installations, causing the government to cut feed-in-tariffs for all renewables.

The levy is based on estimates by Germany's four transmission system operators of the deficit between set feed-in tariffs paid to renewable power producers and the achieved sale price on the spot power exchange.

Under Germany's EEG renewable energy law, the gap between this has to be borne by all end-consumers through the EEG-Umlage with only the most energy-intensive industrial users exempt from the surcharge.

The TSOs estimate that in 2016 the overall cost to be paid to operators of renewable energy installations will be Eur23.1 billion ($26.4 billion), up from Eur21.8 billion for 2015, but still below the Eur23.6 billion estimated for 2014, the TSOs said.

Output from renewables under the EEG law is estimated to rise by 9% or 15 TWh to 176 TWh in 2016, it said.

The levy also includes a liquidity reserve which has risen from Eur1.4 billion last year to Eur2.5 billion, it said. Back in 2014, the reserve had a deficit of Eur2.2 billion.

The reserve account is intended to help balance swings in actual renewable output as well as volatile power prices, therefore avoiding sharp changes in household power bills.

The four TSOs estimate wholesale spot power prices for 2016 14% lower than their previous estimate a year ago.

German year-ahead power prices are currently trading at around Eur29/MWh, their lowest in over 12 years, and down from around Eur34/MWh a year earlier, largely matching the TSOs' estimate, Platts pricing data show.

According to the TSOs estimates, total installed renewable capacity under the EEG law will reach 97 GW by the end of 2016.

Germany's installed wind and solar portfolio alone has risen above 82 GW, generating almost 84 TWh in January-September, with wind output already ahead of last year's total, data from Platts Renewable Power Tracker show.

--Andreas Franke,
--Edited by Jonathan Dart,