How to reduce electricity costs: Important new rules and deadlines
1. Reporting obligation for electricity consumption in 2016
Under the Combined Heat and Power Act 2016 (Kraft-Wärme-Kopplungsgesetz, KWKG), which was replaced after only a year by the KWKG 2017, electricity consumers can benefit from a reduced KWK-Umlage for their electricity consumption in 2016. For electricity consumers which used more than 1 GWh of electricity from the public grid, the KWK-Umlage per kWh is 0.04 Cent (instead of 0.445 Cent per kWh) for their consumption above 1 GWh. For companies in the production sector, whose costs for own-use electricity in the most recent financial year exceed 4 per cent of turnover, the KWK-Umlage is 0.03 Cent per kWh (instead of 0.445 Cent per kWh) for their consumption above 1 GWh. Corresponding verifications for 2016 must be submitted to the grid operator. An electricity consumer which benefited from reductions for 2014 to 2016 totalling more than 160,000 Euro may be required to repay part of the reduction obtained in earlier years.
To take advantage of the reduction in the KWK-Umlage, the amount of electricity consumed for a company's own use, including verifications, if required, must be reported to the grid operator by 31 March 2017. This also applies if the reduced KWK-Umlage has already been reflected in the grid operator's billing. Consumers qualifying for the reduced KWK-Umlage will also see two further levies reduced: the levy under the Ordinance on Electricity Grid Charges (Stromnetzentgeltverordnung) and the offshore liability levy. Here the savings potential is lower.
2. Reducing the KWK-Umlage for electricity consumption in 2017
For electricity consumption from 2017, the KWKG 2017 links the reduction in the KWK-Umlage to the rules in the Renewable Energy Act 2017 (EEG 2017) which allow companies with high electricity costs to apply for the EEG levy to be capped. Therefore only companies which have obtained a decision from the Federal Office for Economy and Export Control (BAFA) reducing the EEG levy for electricity obtained through a particular delivery point will profit from a reduction in the KWK-Umlage from 2017. Deadline for submitting an application for a BAFA decision is 30 June 2017 for the following calendar year. The reduction in the KWK-Umlage remains subject to the European Commission's approval under the State aid rules.
For electricity consumption in 2017 and 2018 there will be a transitional arrangement for companies that use more than 1 GWh but do not benefit from the reduction in the EEG levy and therefore will not be eligible in the future for a reduction in the KWK-Umlage. Companies should note that BAFA insists on the use of a calibrated meter to measure electricity consumption on which a reduced EEG levy is paid. Use of a calibrated meter has been a legal requirement since 2015 under the Act on Measures and Verifications (Mess- und Eichgesetz). The requirement to use a calibrated meter also applies to the onward transmission of energy to third party users on a company's site. However, a company can be exempted from this requirement where the site and users are clearly delimited.
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