Germany: State support for renewables could fall below €20 billion next year

State support for the development of renewable energy sources (RES) in Germany could fall to 18 billion euros next year. That is one billion euros more than in 2023, but significantly less than the 23 billion euros expected this year. Clean Energy Wire reported, citing an analysis by the Institute of Energy Economics at the University of Cologne (EWI).

As part of a medium-term outlook prepared for Germany’s four transmission system operators, EWI examined, among other things, how electricity generation from RES would develop and how much it would cost Germany to fund operating support for these sources. The analysis covered the period 2025-2029.

The results show that installed solar capacity could nearly triple by 2029 compared with 2023.Overall, Germany could have more than 300 GW of installed RES capacity in 2029, roughly double the 2023 figure. RES electricity generation is therefore expected to rise to around 380 TWh by 2029, up from 245 TWh last year.

Support set to rise again in the future

Despite the end of support for 22 GW of solar and wind power plants with high guaranteed feed-in tariffs, the required state support is expected to rise to around 23 billion euros by 2029 due to the sharp increase in the volume of subsidised electricity.

Germany’s operating support scheme ensures that supported renewable energy sources receive a guaranteed feed-in tariff. This means that when wholesale electricity prices fall, the amount of support required rises, and vice versa.

Historically, the difference between the wholesale electricity price and the guaranteed feed-in tariff was covered by customers through their electricity bills. However, Germany changed the funding system during the 2022 energy crisis, and all the necessary funds now come directly from the state budget.