Germany will spend more than $18 billion on its lavish electricity price cap and transmission network subsidies through May of this year, a German government document seen by Reuters has shown.
Germany's electricity price cap will cost it considerably, estimated at $14.5 billion euro, or $15.75 billion-and that's just the cost through May. In addition to those charges, Germany will spend an additional 2.14 billion euros on subsidizing transmission network costs over the next two months alone, Finance State Secretary Florian Toncar said in a Tuesday letter to the lower house of parliament's budget committee.
The electricity price cap-a measure taken to relieve the extreme price pressure on electricity consumers-will be entirely funded by the German government. The costs of the electricity plan-which is set to last until April 2024--are expected to far exceed the $18 billion it will spend just through this May.
The spending plan must now gain approval from the German parliament's budget committee, expected on Wednesday.
In November, Germany hashed a plan to spend as much as $82.8 billion on funding the electricity price cap for all of 2023. But even this is just a fraction of the total planned $199 billion "defensive shield" that Germany said it would deploy to help consumers and companies weather the high cost of energy.
Germany could, of course, end up spending less than it originally planned, if energy prices remain lower than anticipated. Energy prices are lower than when the plan was hatched in the early fall of last year.
Mild weather for much of this year, fat natural gas inventory levels, and weak Asian demand have kept the European benchmark gas prices much lower than anticipated.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group. More