Industrial workers in foundry; Quelle: Fotolia.com/industrieblick

© Fotolia.com/industrieblick

The Special Equalisation Scheme, under which electricity-intensive companies do not have to pay the full EEG surcharge or are exempt from it, has been revised and brought into line with current EU law. In future, the exemption will apply only to electricity-intensive companies in sectors that compete internationally. It is vital that the competitiveness of electricity-intensive industries - which already pay high electricity rates in comparison to their international competition - and the jobs provided by these industries not be jeopardised.

The Special Equalisation Scheme works as follows: beneficiaries pay the full EEG surcharge for the first gigawatt hour they use. For all the electricity they use beyond this amount, they must pay 15 per cent of the surcharge. However, this burden on companies is limited to four per cent of the company's gross value added, or, for companies whose electricity-cost intensity is 20 per cent or more, to a maximum of 0.5 per cent of the company's gross value added (cf. "cap" / "super-cap" in the EU's Guidelines on state aid for environmental protection and energy).

For more detailed information on the Special Equalisation Scheme, please refer to the background paper on the 2015 application procedure for having the EEG surcharge capped in 2016 (only in German). There is also a background paper (only in German) providing information on how the application process for 2015 used to function in 2014. For a list of companies and divisions of companies that are currently beneficiaries of the Special Equalisation Scheme, please consult the website of the Federal Office for Economic Affairs and Export Control (only in German).

In future, levels of electricity-intensity, which are used to determine whether a firm is eligible to benefit from the Special Equalisation Scheme, will be calculated based upon average electricity prices rather than company's actual electricity bills. The exact way in which this is to be done is set out in the Average Electricity Price Ordinance.

Furthermore, there is an expert report (only in German) looking at how and to what extent existing benchmarks and other efficiency requirements can be used in the process of calculating levels of electricity-intensity in the context of the Special Equalisation Scheme. This expert report was commissioned by the Federal Ministry for Economic Affairs and Energy and written by Prognos AG.

As part of the process to reform the Special Equalisation Scheme, the relevant fee ordinance was also adjusted to prevent a situation whereby the higher administrative burden would lead to high cost increases. The amended fee ordinance went into effect on 5 August 2014.

Average Electricity Price Ordinance

The European Commission has approved the Special Equalisation Scheme under EU state-aid rules and the Guidelines on state aid for environmental protection and energy, subject to levels of electricity-intensity, which are used to determine whether a firm is eligible to benefit from the Special Equalisation system, now being calculated based upon average electricity prices rather than a company's actual electricity bills.

In its approval of the Special Equalisation Scheme, the European Commission provides for a transition period of two years for the switch to average electricity prices. This transition period is about to expire. The Average Electricity Price Ordinance is to deliver the necessary changes and put in place a more objective and transparent method for calculating levels of electricity-intensity. Any effects on the EEG surcharge itself will be marginal.

The Länder and the associations affected were invited to comment on the draft Electricity Price Ordinance (only in German) until 25 January 2016.

On 17 February 2016, the Cabinet took note of the Average Electricity Price Ordinance (only in German). The Ordinance entered into force on 24 February 2016. On 29 February 2016, the Federal Office for Economic Affairs and Export Control published this year's list of average electricity prices, which you can find here (PDF: 133 KB) (only in German). This will provide clarity for the companies affected as to what average electricity prices will be taken as a basis for determining their electricity-cost intensity - before this year's application process starts.