The German Supreme Court rejects renewable energy producers’ case against the use of windfall profits

BERLIN (AP) — Germany’s highest court on Thursday rejected complaints from renewable energy producers against a 2022 government decision to use their “excess profits” to help finance a cap on electricity prices.

A submission to the Federal Constitutional Court by 22 wind, solar and biomass energy producers argued that tackling the energy crisis that followed Russia’s large-scale invasion of Ukraine was the responsibility of the state and therefore should have been funded through taxes must be financed. They also said their facilities had not contributed to the high electricity prices.

But the court ruled that the measure was constitutional in the exceptional situation created by the energy crisis.

The “excess profits” that many electricity producers incurred as a result of high energy costs were used between December 2022 and June 2023 to help finance an “electricity price brake”, which would reduce the cost of some of the electricity consumed by households and businesses were limited.

The measure was part of an aid package designed in response to skyrocketing gas prices that, because of the way the electricity market is structured, have increased overall energy costs. That led to unusually high profits for some operators of facilities with low fossil fuel costs, including facilities powered by renewable sources.