Germany's Energy Overhaul: Coalition Plans for Lower Electricity Costs and Cleaner Power

Germany's future coalition government aims to reduce electricity prices by cutting taxes and fees. Plans include building gas power plants and incentivizing electric vehicle purchases, while abolishing certain laws and levies. The coalition also proposes tax rebates for diesel in agriculture and adopting carbon capture solutions.

In a significant move, Germany's forthcoming coalition government—which includes the conservative CDU-CSU bloc and the center-left Social Democrats—plans to slash electricity prices. The coalition targets a reduction by at least 5 cents per kilowatt-hour through the removal of electricity tax and grid fees in Europe's largest economy.

The coalition agreement further outlines ambitious plans to expand the country's energy capacity, with aims to build up to 20 gigawatts of gas power capacity by 2030. In addition, they will push forward legislation to permit carbon capture and storage, endorsing cleaner energy production from gas-fired plants.

The future government also intends to withdraw a divisive heating law enacted in 2022 and eliminate a gas storage levy. To encourage sustainable growth, tax rebates for diesel in agriculture will be reactivated alongside fresh incentives for purchasing electric vehicles, marking a substantial step towards sustainable energy policies.

(With inputs from agencies.)