Germany to Spend More Than €16.5 Billion on Electricity Subsidies Through May
- January 25, 2023
- Posted by: Quatro Strategies
- Category: Energy
Germany expects to spend more than €16.5 billion on its electricity price cap and transmission network subsidies through May of this year. The country’s plan on electricity price cap will cost it significantly, estimated at €14.5 billion, just through May. It will spend another €2.14 billion on its subsidies for transmission network costs over the next two months. The electricity price cap, which was implemented to relieve the extreme price pressure on electricity consumers, will be entirely funded by the German government. The costs of the electricity plan, which will last until April 2024, are expected to far exceed the €16.5 billion it will spend just through this May.
The spending plan must now gain approval from the German parliament’s budget committee, expected on Wednesday.
In November, Germany had laid out its plan to spend more than €80 billion to fund electricity price cap for all of 2023. But this is just a fraction of the total planned €200 billion “defensive shield” that Germany said it would deploy to help consumers and companies weather the high cost of energy.
Germany could still end up spending less than it originally planned if energy prices remain lower than anticipated. Energy prices are lower than when the plan was rolled out in autumn last year.
Mild weather for much of this year, healthy natural gas inventory levels, and weak Asian demand have kept the European benchmark gas prices much lower than anticipated.
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