It still sounds a little vague what the FDP writes about the future of renewable energies in its twelve-point economic plan. But even so, it can already be seen that the liberals are aiming for nothing less than a revolution for green electricity. They want to “end the support for renewable energies as quickly as possible,” it says briefly and without giving a date. Photovoltaic and wind turbines are to be transferred to the “market”. This means the end of EEG funding, i.e. the funding under the Renewable Energy Sources Act, which has guaranteed private individuals such as operators of large wind and solar parks secure income for almost a quarter of a century and is thus intended to advance the energy transition.
Can wind and solar power now be sold profitably? Or will that paralyze expansion? For the energy association BDEW, the consequences are clear: “If the EEG funding were to disappear in the short term, for example in the next one or two years, in our view this would lead to a collapse in the expansion of renewable energies and thus acutely endanger the climate goals,” says association leader Kerstin Andreae. The current funding and economic system is not prepared for such a completely new situation.
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The FDP has long complained that the costs of funding are tearing a huge hole in the budget, and they have a point there. Since the federal government abolished the EEG levy a good two years ago, the money for funding has come from the federal budget, more precisely from the Climate and Transformation Fund (KTF). This year alone, the network operators estimate that an additional 17 billion euros, which have not yet been budgeted, will be due. A sum that could also give Federal Economics Minister Robert Habeck a headache. Because it is becoming increasingly difficult to raise the subsidy from the KTF alone. The Ministry of Economics circles are also critical of the abolition of the EEG levy and the fact that everything now has to be financed from the budget.
Prices for solar modules have fallen
But would ending the subsidy be a solution? Ultimately, around 80 percent of consumption in Germany should come from renewables by 2030. In order to achieve this, we need a lot more green electricity than today. EEG funding was introduced almost 25 years ago. For private individuals who feed the electricity they generate on their roofs into the grid, as well as for operators of large wind or solar parks. At the time, it was highly controversial that Germany was relying on solar at all; after all, the Federal Republic is not located in sunny southern Europe. To ensure that the technology still becomes established and the purchase is worthwhile, the subsidy rates in the early years were sometimes ten times higher than the wholesale price for electricity, but they have now fallen significantly.
A lot has happened since then. The weather is still the same in Germany (although climate change has changed that – there are more hours of sunshine). The yield per solar cell has nevertheless increased significantly and the efficiency has increased over the years. At the same time, prices for solar modules, for example, have fallen, also thanks to cheap imports from China. Wind turbines can now also be built more cost-effectively.
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In fact, there are already numerous wind farms and large-scale solar parks that do not require EEG funding. In 2020, for example, the energy company EnBW built Germany’s largest solar park in Weesow-Willmersdorf, Brandenburg. It is also one of the first systems that does not require government money. And EnBW is currently building a huge wind farm in the North Sea, also without EEG funds.
However, the electricity from the systems is not simply sold on the market at exchange prices; given the fluctuating prices and energy production, that would be very risky and would probably not be worthwhile. The wind farm is possible because EnBW has concluded contracts with electricity buyers, such as Deutsche Bahn or Frankfurt Airport. Experts call these power purchase agreements, or PPAs for short. The operators have fixed income and the electricity customers protect themselves against market price developments by supplying energy from renewable systems – and they can also market themselves as green electricity customers.
Wind power on land is hardly possible without EEG
The energy economist Lion Hirth therefore assumes that large solar and offshore wind farms could be worthwhile even without subsidies. It’s different with wind turbines on land (they have a lower electricity yield than at sea): “Without EEG there would probably be very few projects left,” says Hirth. But the calculation is also tight for solar and offshore. This is due, for example, to the currently high interest rates that are due on loans for such large investments.
EEG funding continues to be “sensible and necessary,” says Anne Held, head of the renewable energy department at the Fraunhofer Institute for Systems and Innovation Research. Germany wants to be climate-neutral by 2045, so it needs a “high pace of expansion, which is difficult or at least uncertain without government funding.”
The energy expert says the biggest problem is the strong fluctuations in green electricity. When the sun shines and the wind blows, a lot of energy is generated at the same time. This causes stock market prices to fall, sometimes even below zero. This also reduces revenues. This is the “cannibalization effect”. And this will increase in the future as the number of wind turbines and photovoltaic systems increases. Battery storage could counteract this, but they first have to be installed on a large scale.
The BDEW also believes it is important to counteract the price decline by making better use of green electricity. The large amounts of green electricity are purchased via the connection to “electrolyzers, heat pumps, power-to-heat, electric vehicles and electricity storage devices and make a decisive contribution to overall decarbonization,” says association boss Andreae.
According to energy expert Held, there is still something to be said for EEG funding. “According to industry statements, the direct supply contracts (i.e. the PPAs) in Germany are currently too low for many systems to be economical.” And this delays new projects. Banks are also cautious: direct marketing of electricity via the electricity exchange without fixed purchase contracts would generally not be financed, says Held.
No solution to budget dispute
Ultimately, it is difficult to predict whether green electricity power plants will be worthwhile without government support. Because nobody knows the stock market price in five years – and it is also difficult to predict how the prices for photovoltaic systems and wind turbines will develop. Investors don’t like such uncertainty at all – which is why one can assume that expansion would at least slow down without government protection.
This may also deter private individuals or small commercial businesses who have installed a few photovoltaic systems in their warehouse. Although they are less dependent on EEG than the large systems. The most important thing here is how much of the electricity generated you use yourself. Most households only feed a small portion into the grid. Experts assume that this will remain attractive even without the EEG, because the main aim here is to save electricity costs and network fees.
The FDP proposal has one catch: Even if the federal government were to bring itself to end the funding soon, this would not be a solution for the current budget negotiations anyway. The system operators are guaranteed funding for 20 years – and this still has to be paid for from the state treasury.
It still sounds a little vague what the FDP writes about the future of renewable energies in its twelve-point economic plan. But even so, it can already be seen that the liberals are aiming for nothing less than a revolution for green electricity. They want to “end the support for renewable energies as quickly as possible,” it says briefly and without giving a date. Photovoltaic and wind turbines are to be transferred to the “market”. This means the end of EEG funding, i.e. the funding under the Renewable Energy Sources Act, which has guaranteed private individuals such as operators of large wind and solar parks secure income for almost a quarter of a century and is thus intended to advance the energy transition.
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LF-2024: the DGI publishes a circular note relating to tax measures
This note reviews, in detail, the specific measures concerning value added tax (VAT), corporate tax (IS), income tax (IR), registration fees, as well as on the common measures introduced by LF-2024.
As indicated in the preamble, this year’s finance law establishes the continued implementation of framework law No. 69-19 on tax reform.
Thus, the LF-2024 introduced the VAT reform, according to a progressive approach over a period of three years (2024, 2025 and 2026), in order to ensure the visibility and stability of our tax system, indicates the same source , adding that the VAT reform aims to support purchasing power, ensure economic neutrality and promote tax fairness.
LF-2024 also includes measures to combat tax fraud and integrate the informal sector, such as improving the examination of the tax situation of individuals, removing the abuse of rights commission and the introduction of the right to make mistakes to correct errors in tax declarations. The circular note presents these tax measures by type of tax.
It also highlights measures aimed at integrating the informal sector and rationalizing tax incentives, notably through the establishment of new reverse charge and VAT withholding regimes.
Measures to harmonize and clarify tax base rules are also planned, such as the clarification of tax regimes for rentals of buildings and the review of sanctions in the event of non-compliance with reporting deadlines.
With regard to corporate tax, the LF clarifies the rate applicable when net profit exceeds one hundred million dirhams, while adjustments are made to the methods of taxation of profits from movable capital.
Changes are also made to registration fees, in particular the alignment of rates for cooperatives and associations allocating premises or land to their members.
In addition, the note reveals that the common measures include the consecration of the exemption of the Mohammed VI Foundation of Sciences and Health, the institution of the “right to make mistakes” for taxpayers, the abolition of the advisory commission of recourse for abuse of rights, and the revision of the procedure for examining the tax situation of individuals.
LF-2024: the DGI publishes a circular note relating to tax measures
BdeM presents exhibition on the importance of the SPEI
Mexico City. The Banco de México Museum (BdeM) presented the temporary exhibition: “Payments in motion. The SPEI revolution, an exploration that facilitates the understanding of the infrastructures of financial markets”, which portrays the technological innovation developed by the central bank for the benefit of the entire network of payment systems.
According to Jessica Serrano Bandala, director of Financial Education and Cultural Promotion of the BdeM, the Interbank Electronic Payment System, better known as SPEI, has not only helped reduce payment processing times, but also strengthen security in the transactions.
In this way, said system, which this year is celebrating 20 years of implementation, has become an essential pillar of the country’s financial infrastructure.
The exhibition, mounted in the Museum of the Bank of Mexico, located at Av. 5 de Mayo No. 2 col. Center, can be visited for free from Friday, April 26 to Sunday, July 21, 2024, from Tuesday to Sunday, from 11:00 a.m. to 5:00 p.m.
According to the director of Financial Education and Cultural Promotion, the exhibition is organized around five thematic cores: basic payment, distance payment, the role of Banco de México in the modernization of payment systems, the operation of the SPEI and their operational technologies, as well as the processes behind the transfers.
#BdeM #presents #exhibition #importance #SPEI
– 2024-04-29 01:09:24
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