More than half a billion euros in compensation for unused green electricity

Last year, renewable energy producers received compensation payments of €553.94 million from the federal government for unused electricity when they had to shut down their plants and their electricity could not be fed into the grid due to grid bottlenecks. This is according to a response from the Federal Ministry of Economics to Dietmar Bartsch, a member of the Left Party, which was obtained by the German Press Agency.

The figures show that compensation payments have declined over the past few years, indicating progress in grid expansion. While compensation payments totaled €807.10 million in 2021, the total in 2023 was €580.32 million—slightly less than last year.

The outlier was 2022, with €186.14 million. However, electricity prices were very high at that time due to the energy crisis. One explanation: operators were already earning good money at market prices and received little subsidy.

Bartsch called it absurd that electricity is being "thrown away" in Germany. "More than half a billion euros in compensation was taken out of the pockets of electricity customers last year, and more than two billion euros in compensation in four years." Economics Minister Katherina Reiche (CDU) must act and, together with the states, resolutely push forward grid expansion. "The federal government's plans to reduce electricity prices by a measly five cents are correct, but insufficient."

Operators of wind turbines and solar power plants benefit from a government-guaranteed minimum purchase price for their electricity. The federal government pays the difference if the market price falls below this guaranteed level. This is intended to provide planning security and promote the expansion of renewable energies.

Plant operators often sell their electricity in advance. On windy days, wind turbine operators may have to disconnect their plants from the grid to prevent overload. By this time, they have usually already been paid for the electricity – even if it doesn't actually flow. If they received less than the guaranteed price, the government will still pay them the difference.

The ministry's figures concern the difference in payments from precisely those periods in which plants had to be curtailed due to the threat of grid overload.

Because there are more wind turbines in northern Germany, more renewable electricity is generated there than in the south. Therefore, operators of renewable energy plants in Lower Saxony and Schleswig-Holstein received more compensation payments overall than those in other federal states.

Especially on windy days, the transmission line capacity is insufficient to transport the electricity. How often the government has to compensate operators in situations where their plants are not allowed to feed in electricity depends on the weather and the state of the power grid. The specific amount in each individual case also depends on the respective market price.