Germany’s highest court rejected renewable energy producers’ appeals on Thursday, 28 November, regarding the government’s 2022 decision to use their windfall profits to offset high electricity prices. The petition was filed by 22 wind, solar, and biomass power producers with the Federal Constitutional Court, which determined that addressing the energy crisis resulting from Russia’s war in Ukraine was the state’s responsibility and should, therefore, be financed through general taxes. The producers argued that their facilities did not contribute to high electricity prices.
However, the Constitutional Court ruled that the measure was constitutional in light of the emergency created by the energy crisis, according to the AP news agency.
Between December 2022 and June 2023, many electricity producers, primarily those using renewable sources, were imposed a tax on excessive profits, a result of extremely high energy prices.
The revenue from this tax was used to help fund the government’s electricity price brake mechanism, which intended to limit electricity costs for households and businesses partially. This action was part of a relief package designed in response to soaring gas prices, which increased overall energy costs due to the electricity market’s structure.
Consequently, this situation resulted in unusually high profits for some operators of low-cost fossil fuel facilities and those generating electricity from renewable energy sources.
