Germany's Renewables Energy Act

Last updated: 9 May 2023

As of 14 December 2020, Germany's ruling coalition agreed modifications to its energy law to create the legal basis for continuing the expansion of renewable energy in the long term and help the country meet its goal of producing 65% of its electricity from clean sources from 2030. 


The law came into force as of 1 January 2021. It seeks to help ensure that both electricity supply and electricity consumption become carbon-neutral before 2050. To this end, the law specifies the pace at which sustainable energy such as wind and photovoltaics are to be expanded over the next few years. 


For the first time, the 2021 Renewable Energy Sources Act provides for annual monitoring, which can be used to make adjustments if necessary. Germany’s renewable energy levy, the surcharge in consumers’ electricity bills that goes to support renewables, will be EUR 0.065 (USD 0.077) per kWh next year, reduced from EUR 0.06756 in 2020. Average households will see power prices fall by 1%. German consumers can look forward to lower energy bills next year after a reduction in a surcharge they pay to support renewable power. The transmission grid companies -- which include Elia’s 50Hertz, Dutch Tennet, EnBW’s Transnet BW and Amprion -- said the cap on the surcharge at 6.5 cents would require 10.8 billion euros of federal support payments. 


The government also decided that the fee would fall further to 6.0 cents in 2022 to relieve customers from cost burdens in the fight against the economic fallout from the coronavirus. The Federal Cabinet passed the amendment to the Renewable Energy Sources Act, the so-called EEG amendment 2021. The amendment to the Federal Requirements Plan Act with regulations on the expansion of the electricity grid was also passed in the cabinet.

With regard to coal mine methane emissions, this act provides a guaranteed fixed payback tariff for 20 years through feed-in tariffs or fees paid for electricity produced from previously approved Coal Mine Methane (CMM) or Abandoned Mine Methane (AMM) projects (Sec. 25). CMM operators have the authority to sell the carbon credits generated by the project and have the added incentive of paying no local taxes or royalties on CMM projects. This act also provides a framework for integrating CMM to the grid (Sec. 8) by requiring grid system operators to quickly connect installations for the generation of electricity from renewable energy sources and from mine gas to their grid at a suitable point. 


Update 26 November 2021:

In order to meet its renewable energy targets, the Federation and the Länder established a new Bund/Länder Cooperation Committee under the Renewable Energy Sources Act.

According to a new report published by the Federation and the Länder, the targets are not to be fulfilled if new wind-power projects are not approved. The amount of land dedicated to onshore wind farms is not sufficient to meet the 2030 target, which amounts to 71 GW of installed capacity and for annual auction volumes.

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