The German parliament passed a revision to the German
Renewable Energy Source Act (the "EEG") on 30 June 2011
and the Federal Council (Bundesrat) approved the same on 8 July
The amendments to the EEG did not have the purpose to limit the
investments in new renewable energy capacity and thus costs to the
German state as was thought by some international spectators. In
contract the amendments came in connection with a decision to
abandon nuclear power by 2022 and intend to secure a continued
growth in the renewable energy capacity in order to reach the
ambitious goals of not less than 35% of renewable energy in
electricity supply in 2020, not less than 50% by 2030, not less
than 65% by 2040 and not less than 80% by 2050, e.g. more
aggressive goals than earlier set forth, and goals that are now
codified in the latest version of the EEG.
The most significant changes relate to wind power and the
attempt to ensure a more flexible electricity market.
Tariff: The already existing guaranteed feed-in tariff system
remains almost unchanged. The tariff for wind turbines commissioned
in 2012 amounts to EUR 89.30 per MWh for a period of five years
with an extension of up to 15 years based whether the production
from the turbine (wind park) matches the reference production.
Thereafter the tariff falls to a base rate of EUR 48.70 per
Degression: The guaranteed feed-in tariff is subject to an
annual degression which has been increased from 1% p.a. to 1.5%
p.a., e.g. if the guaranteed tariff for 5 + (up to) 15 years will
for the full period be 1.5% lower than for projects commissioned in
the preceding calendar year.
System Services Bonus: The system services bonus is further
still offered for wind turbines commissioned prior to 1 January
2015, if such wind turbines fulfil the technical requirements set
forth in the Ordinance on System Services for Wind Energy Plants
(SDL bonus). The SDL bonus amounts to EUR 4.80 per MWh.
Repowering Bonus: The EEG further offers a limited repowering
bonus for repowering of projects commissioned prior to 31 December
2001. However, as repowering bonus aims to promote the repowering
of projects which are considered problematic to integrate in the
system, the repowering bonus carries certain conditions.
Compensation claims: As a mean to better control the grid, wind
turbines must be equipped with technical means to control the
feed-in (including a full short down). Compensation claims for
losses due to a required part or full shut down are generally
capped at 95% of the loss. However, the 95% only applies up to 1%
of the annual output of the wind turbine.
Degression: Off-shore wind parks will also be subject to a
degression of the guaranteed tariff. However, the start of the
degression period has been moved from 2015 to 2018, but the annual
degression been increased from 5% to 7%.
Tariff: The tariff (including a EUR 20 per MWh "sprinter
bonus" paid for installations commissioned prior to 2016)
amounts to EUR 150 per MWh for a period of 12 years from
commissioning. The initial remuneration period may further still be
extended based on the distance from the mainland and the water
Compression model: An optional compression model is offered. If
the compression model is opted for the initial tariff remuneration
increases from EUR 150 per MWh to EUR 190 per MWh. However, the
period for such increased tariff remuneration is only 8 years
instead of the 12 years. Any extendable time period based on the
distance to the mainland and water depth is further only
remunerated with EUR 150 per MWh.
Financing: The German development and reconstruction bank, KfW
has further established a EUR 5 billion off-shore wind finance
programme. KfW can thus take a significant risk stake in the
financing of such wind parks alongside the commercial risk
The Electricity Market
In order to incentivise the market driven electricity trading,
the option to opt in and out of the guaranteed tariff scheme which
was introduced in 2009 has been amended. With the latest amendments
the owners can still opt in and out, but now they still receive a
subsidized contribution while selling their electricity in the open
market. The subsidized contribution to be paid will be calculated
as the difference between the average market prize in the preceding
month and the guaranteed tariff which the installation would have
been entitled to, had the electricity not been sold in the open
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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