Legal settlement

German Government and European Commission agree on energy package

Michael Hahn, 16 Dec 16
Germany’s Federal Ministry for Economic Affairs has settled a dispute with the European Commission over the compliance of German energy legislation with European state aid rules. Specifically, the dispute involved the country’s Combined Heat and Power Act, Electricity Market Act and Renewable Energy Sources Act.

According to the settlement, disputed relief measures for energy-intensive companies will remain in place, and support for CHP plants with a capacity between 1 and 50 MW will be awarded through auctions from winter 2017/2018. Own consumption of existing plants will remain exempt from the Renewable Energy Act surcharge, with modernised plants paying 20 percent, and no change for new plants. The Electricity Market Act provides for a system review in autumn to assess the need for a capacity reserve. If found to be necessary,  the reserve will be implemented in mid 2017 by means of a technology-neutral auction of up to two GW. The total amount of the reserve will then be reviewed on a regular basis. The plan has yet to be approved by the Commission. The rulings will provide planning security for companies and help secure jobs in Germany, economics minister Sigmar Gabriel (SPD) has claimed.

However, Hermann Falk, managing director of the German Renewable Energy Federation, has roundly criticised the agreement: “We find it unfathomable that the use of electricity from lignite plants for lignite mining operations continues to be exempted from the Renewable Energy Act surcharge – thereby increasing it – while electricity from renewable plants with an installed capacity greater than 10 kW is subject to the charge.” Concerns were also voiced by energy policy spokeswoman for the Alliance 90/ The Greens parliamentary group Julia Verlinden: “The German Federal Government is wrecking efficient CHP for good. After the agreement with the European Commission, CHP projects will suffer delays of at least another year. The ongoing uncertainty over financing conditions will in effect lead to the suspension of all planned CHP projects, causing further job losses in the affected companies.”

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