Germany's EEG subsidies seen to rise to EUR 23bn by 2029

Subsidies for operation of renewable energy plants in Germany could reach EUR 18.2 billion (USD 19.7bn) in 2025 and grow further to nearly EUR 23 billion by 2029, according to a mid-term forecast prepared by the Institute of Energy Economics at the University of Cologne.

In comparison, the subsidies provided under Germany's Renewable Energy Sources Act (EEG) stood at EUR 17.3 billion in 2023. These subsidies are inanced through the federal budget following the government's decision in 2022 to abolish the renewables surcharge, paid by consumers with their electricity bills.

In 2025, the largest share of the expected payments, or about EUR 11.1 billion, will support solar installations, according to the report published on the joint website of Germany’s grid operators. Around EUR 3.5 billion will finance biomass energy and about EUR 1.9 billion will go for offshore wind electricity. Payments for onshore wind power are projected at the comparatively low level of around EUR 500 million.

The estimated increase to nearly EUR 23 billion by 2029 reflects the expansion of subsidised facilities and an assumed decline in electricity prices. Germany’s subsidised energy capacity is expected to double to 311 GW by the end of 2029 compared to 151 GW at the end of 2023. In particular, the installed capacity of solar and wind energy systems is seen to increase.

In terms of output, renewable energy facilities could produce around 380 TWh in 2029 on average weather conditions, up from around 244 TWh in 2023.

The figures presented are based on the trend scenario, which is considered the most likely to occur. The report also includes an upper and a lower scenario, with variations in the data reflecting potential weather conditions.

(EUR 1 = USD 1.083)

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