German parliament adopts renewable energy reform

The German Bundestag, lower house of the parliament, on Friday approved a slew of reforms of the country's renewable energy act (EEG) with a view to slow cost increases and achieve sustainable energy transition, German television ARD reported.
The reform, which was adopted after months of discussion, includes reducing subsidies for renewable energy power systems and a stronger control of the expansion of green energy.
According to the reform plan, German companies will face strict criteria when applying for discounts on green energy surcharges paid by electricity users to support the country's energy transition.
In addition, companies that generate their own electricity will be required to pay green energy surcharges to help subsidize the country's renewable energy program. So far, they have been excluded from paying the surcharges.
Germany is planning a shift to renewable energy, away from fossil fuels and nuclear power. Europe's largest economy is moving to nearly double its green power share to 45 percent by 2025. Its ambitious energy transition, however, has seen many problems including a sharp rise in the domestic electricity costs.
The EEG, the main pillar of Germany's energy transition, establishes guaranteed feed-in tariffs for all electricity generated by renewable energy sources.
The gap between the market price of electricity and this fixed tariff is filled by renewable energy surcharges. Since energy-intensive enterprises have been exempted from paying the surcharges, other consumers have to pay more.
With a revised EEG act, set to come into force in August, the German government hopes to put the energy transition on a sustainable path.
The reform is designed to slow the rapid expansion of green power, which already accounts for 25 percent of Germany's electricity. It also aims to force new investors in green power to take some risk and protect private households and smaller energy users from bearing the brunt of cost rises by forcing industry to pay more.