Germany says falling prices could lower state spending on energy price brakes
BERLIN, Jan 17 (Reuters) - Germany's spending on its gas and electricity price caps could be lower than expected due to falling energy prices on futures markets, which will also reduce the revenues from a windfall profit levy on energy firms, the finance ministry said.
Asked whether lower energy prices have pushed the government to change the spending forecast of its allocated energy aid package, a ministry spokesperson said: "The actual financial needs depend heavily on the further development of gas and electricity prices for end consumers."
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Germany last year set out a 200 billion euro ($216.32 billion) relief package to shield households and industry in Europe's biggest economy from surging energy prices, including gas and electricity price brakes.
Under that plan, Berlin envisaged spending some 83 billion euros on those price brakes this year, the ministry said, adding that the windfall profit levy was expected to bring in revenues of tens of billions of euros to partly finance the energy cap.
"Since the economic plan was decided, gas and electricity prices on the futures markets have fallen, which could lead to lower spending on the gas and electricity price brake," the ministry said.
Benchmark Dutch front-month European gas prices have fallen almost 85% since their peak of over 340 euros per megawatt hour (Mwh) last August to around 53 euros/MWh as countries managed to build huge gas reserves ahead of winter which have not yet been significantly drawn upon due to unseasonably mild temperatures.
Germany has faced criticism over its mammoth state aid package for energy, which far outstrips what other nations in the European Union can afford.
A lower spending bill for energy subsidies would free up cash at a time when European governments are facing calls to significantly step up support for green investments in industry.
The EU is concerned that without more investments in this area, European companies will increasingly move to the United States, which has a $369 billion scheme to subsidise green energy production.
On Tuesday European Commission President Ursula von der Leyen outlined plans to allow more state aid for clean tech sectors, and also to launch a new EU fund to support green industrial investments, to try to counter uneven spending among EU countries. ($1 = 0.9246 euros) (Reporting by Riham Alkousaa, Kate Abentt and Susanna Twidale, Editing by Miranda Murray and Gareth Jones)