German Economy Minstry presents plans for skimming power prices for Nov. 18

German Economy Ministry presented a draft document, citing that the cabinet should talk about power and gas prices brakes on November 18.

Key takeaways

Power price brake to be funded by charges of 90% levied on coincidental producer profits, which will also help stabilise transmission grids.

There is to be no interference with wholesale market dynamics, signals that encourage savings by consumers will be kept intact.

German power price brake would take effect retroactively for March-Nov 2022 for spot prices, futures market to be added from December.

German power funds would be collected by skimming profits from electricity from renewables, waste, mine gas, nuclear, brown coal, mineral oil products.

German hard coal, gas and biomethane-to-power production to be exempt from skimming process.

Government levy on profits from intended German power futures hedging would affect deals from 2023 ex ante up to the year 2026 for time being, based on audited quarterly reports.