Latest market news, Germany plans to impose a 90% profit tax on profit of some clean energy companies such as photovoltaics, offshore wind power and nuclear power.
According to the draft, profit tax will be levied step by step according to the fuel used by power generation companies, that is, when the electricity price of solar, offshore wind and nuclear energy exceeds 130 euros/MWh, the German government will tax 90% of the excess on power company .
The draft will be adopted by the country's parliament on December 16 and will take effect on January 1 next year.
Germany's proposed profit tax level is lower than 180 MWh recommended by the European Commission . But Germany's renewable energy generators warn that such taxes will hinder the investments needed to help Germany get rid of its dependence on imported fossil fuels.
In fact, the issue of huge profits and taxes has always existed. In July this year, the European Commission proposed to set a revenue cap of 180 euros/MWh (US$175/MWh) for "super marginal" electricity producers such as renewable energy. The proposal is because these manufacturers "always earn special income" as gas plants push up bulk electricity prices.
6-July, European oil and natural gas prices soared, once exceeding 500 euros per megawatt-hour (50 euro cents per kilowatt-hour). The surge in electricity prices caused EU to introduce marginal pricing for huge profit tax.
European Commission recommends setting the super marginal producer revenue cap to 180 euros/MWh, but also suggests that member states can adjust between different technologies and even implement lower caps. The proposed measures will be implemented no later than December 1, 2022 and will continue until March 31, 2023.
After this proposal was issued, markets such as Spain and Greece have proposed to impose huge profit tax on power generators, and Germany also said it would implement price caps for specific technologies. 2 billion euros! Spain imposes a "huge profit" tax on electricity and oil and gas companies.
What is the impact of "high profit tax"? Ryan Alexander, head of European power market research at the consulting firm Aurora Energy Research, said that given that solar photovoltaic power generation is the cheapest source of electricity, there is a risk that the government will overturn its authority and implement a lower upper limit.
Alexander told PV Tech: "Projects that have bilateral CFDs but do not get market prices will not be affected by these measures." But if you get some kind of ups through your subsidy program, such as unilateral CfD, the idea of cap is really to take that income away from you, collect and redistribute.
If the execution price of solar energy projects supported by PPA is less than 180 euros/MWh, they should not be affected by the upper limit. "
trade agency SolarPower Europe said that in terms of PV assets that may be affected by these measures, the revenue caps provide guarantees for solar PV plants that cannot make additional profits in the power market, such as those supported by on-grid electricity prices, CFDs and Enterprise Power Purchase Agreements (PPAs).
Even if you take a step back, "from a higher perspective, 180 euros/MWh is still an attractive price given the bulk selling price of about 40 euros/MWh nearly a decade ago. ”
At the same time, natural gas prices have fallen recently. As the price declines, the impact on photovoltaic installation will not be too great. Photovoltaic power generation is the lowest-cost power generation in Europe. (Jules Scully)
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