Germany's top court rejects renewable energy producers' case against use of windfall profits

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Germany’s highest court has rejected complaints by renewable energy producers against a government decision to use their “excess profits” to help finance a cap on electricity prices

BERLIN — Germany's highest court on Thursday rejected complaints by renewable energy producers against a government decision in 2022 to use their “excess profits” to help finance a cap on electricity prices.

A submission to the Federal Constitutional Court by 22 generators of wind, solar and biomass energy argued that dealing with the energy crisis that followed Russia's full-scale invasion of Ukraine was the responsibility of the state and should therefore have been financed from taxes. They also said their facilities hadn't contributed to high electricity prices.

But the court found that the measure was, in the exceptional situation that the energy crisis created, constitutional.

“Excess profits” that many electricity generators ran up as a result of high energy costs were used between December 2022 and June 2023 to help finance an “electricity price brake,” capping the cost of part of the power households and businesses used.

The measure was part of a relief package drawn up in response to sky-high gas prices that, because of the way the electricity market is structured, pushed up overall energy costs. That led to unusually high profits for some operators of facilities with low fossil fuel costs, including those powered by renewable sources.

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