BERLIN — On Thursday, Germany’s highest court dismissed the grievances raised by renewable energy producers regarding a government measure from 2022 aimed at utilizing their “excess profits” to finance a cap on electricity prices.

A complaint filed with the Federal Constitutional Court by a group of 22 wind, solar, and biomass energy producers argued that the responsibility for addressing the energy crisis triggered by Russia’s full-scale invasion of Ukraine lay with the state, which should have covered the costs through taxation. They contended that their operations were not the cause of the elevated electricity prices seen during this period.

The court, however, determined that the government’s actions were constitutionally valid given the exceptional circumstances brought on by the energy crisis.

From December 2022 to June 2023, the government utilized the “excess profits” amassed by various electricity generators due to soaring energy prices to support an “electricity price brake,” introduced to limit the amount that households and businesses would pay for a segment of their electricity consumption.

This initiative formed part of a larger relief strategy designed to combat the soaring gas prices that had led to a subsequent increase in overall energy costs, largely due to the structure of the electricity market. Consequently, this situation resulted in abnormally large profits for specific operators who used low fossil fuel costs, including those running renewable energy facilities.