Renewables funding

The cap is coming

Tim Altegör, 22 May 14
In early April, six months after coming to power, Germany’s new coalition government reached an agreement on the reform of the country’s Renewable Energy Sources Act, and set out plans to “overhaul” the way it funds clean electricity. Renewables proponents fear the reform is putting Germany’s “Energiewende” at risk.

Speaking about the decision, Sigmar Gabriel, federal minister for economic affairs and energy, had this to say: “In a very short space of time, we have laid the foundations that will allow us to reboot the switch to renewables.” The bill plans to introduce a “flexible ceiling” that caps expansion in Germany’s onshore wind sector at between 2,400 and 2,600 megawatts (MW) each year. Tariffs will sink if the limit is exceeded.

However, contrary to the energy ministry’s original plans, the expansion ceiling no longer includes repowering old turbines. Electricity from onshore turbines will qualify for a starting tariff of EUR 0.089 per kilowatt-hour (kWh) for the first five years. This will fall to EUR 0.0495 for the following 15 years. The period in which the operator receives the higher tariff will be extended by one month for every 0.36 percent that the plant’s yield falls below 130 percent of its reference yield. The period will also be extended by a month for every 0.48 percent that the yield falls below 100 percent of the reference value. From 2016, tariffs will be reduced by 0.4 percent per quarter. The bill will also do away with thebonuses currently paid for repowering and providing system services. As for expanding offshore wind power, the cabinet’s reforms will see the 2030 target fall from 25 to 15 gigawatts (GW). Tariffs of EUR 0.19/kWh will apply until 2018.

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As far as solar energy is concerned, the ministry has said it will be aiming for gross annual expansion of 2,500 MW. However, solar associations and consumer organisations are unhappy that operators that consume their own solar electricity will have to pay 50 percent of the surcharge applicable under the Renewable Energy Sources Act. The government’s plans mean bioenergy will see a vast reduction in its expansion targets, with just 100 MW set to be added each year. However, the bioenergy ceiling only applies to new systems and not to extensions to existing plants.

If the German Bundestag approves the cabinet’s proposal (as is expected) and the law enters into force on 1 August 2014, then all electricity from renewable sources will have to be sold directly. That means plant operators will have to find customers for their electricity themselves. Fixed feed-in tariffs would then, in the medium term, be discontinued. The cut-off date for the reforms is likely to be set at 22 January 2014. For a plant to still fall under the old version of the renewables act, it will have to have been approved prior to this date.

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