Germany: The German Renewable Energy Act Of 2012

Last Updated: 16 December 2011
Article by Marius A. Boewe and Andrea Stratmann LLM

Originally published on December 8, 2011

Keywords: German government, Renewable Energy Sources Act, EEG, Offshore Wind

The German government has recon-sidered the role of nuclear energy in Germany as a result, in part, of the nuclear accident at Fukushima, Japan. This decision has resulted in recent energy policy decisions to phase out nuclear-generated energy by the end of 2022, and to increase use of renewable energy sources. In addition, the transition from reliance on conventional energy to the use of renewable energy is further driven by the nation's ambitious climate protection policy.

Germany aims to incrementally increase its use of renewable energy:

17 percent in 2010, 20 percent in 2011, at least 35 percent by 2020, at least 50 percent by 2030, at least 65 percent by 2040 and at least 80 percent by 2050. Under this plan, greenhouse gas emissions will be reduced from their 1990 levels by 40 percent by 2020 and up to 95 percent by 2050.

In order to achieve these aims, the German Federal Parliament (the Bundestag) has revised the current Renewable Energy Sources Act (EEG 2009). The revised act (EEG 2012) is scheduled to come into force on January 1, 2012. EEG 2012 affirms these aggressive energy goals and thereby complies with previous EEG revisions enacted in 2004 and 2009. Although these numbers may seem quite ambitious and far-reaching, it must be noted that since 2000, when the first EEG was implemented, the share of Germany's power generated from renewable sources has exceeded each legislative aim so far.

EEG 2012, like its predecessors, covers a wide range of hydropower renewable energy sources, including wave power, tidal power, salt gradient and flow energy, wind energy, solar radiation and geothermal energy. The act also addresses energy from biomass, including biogas, biomethane, landfill gas and sewage treatment gas, as well as biodegradable municipal and industrial waste.

In addition, the EEG guarantees that 100 percent of the power generated from such renewable sources will be fed to public grids at a guaranteed minimum price. The EEG provides a special compensation scheme relative to these energy sources. It allows for the priority purchase, transmission and distribution of, and payment for, the entire available quantity of electricity produced from renewable energy sources and from mine gas electricity by the grid system operators. EEG 2012, moreover, imposes an equalization scheme on Germany's energy consumers through revisions in most of the nation's energy feed-in tariffs.

The following table compares tariffs for selected renewable energy sources placed in operation in 2012 under EEG 2009 and EEG 2012.

Renewable Energy Source

Tariff under EEG 2009 in €/US$

Tariff under EEG 2012
in €/US$

Tariff Difference
in Percent

Biomass for plants less than 150 kW in size

€0.11/kWh
(US$0.16/kWh)

€0.14/kWh
(US$0.20/kWh)

+30 percent

Geothermal plants
(irrespective of plant size)

€0.16/kWh
(US$0.22/kWh)

€0.25/kWh
(US$0.36/kWh)

> + 50 percent

Offshore wind

€0.13/kWh
(US$0.19/kWh)

€0.15/kWh
(US$0.21/kWh)

+ 15 percent

The majority of these tariffs are subject to a so-called "degression." That is, the tariff to be paid for the next 20 years depends on the year in which the plant starts operating. The later this start-up occurs, the lower the feed-in tariff will be for the entire 20 years.

Degression will have a massive impact on the profitability of any energy production investment. For example, an onshore wind installation that begins operating in 2012 will receive 9.41 ct/kWh, whereas the same installation starting operation in 2015 will receive only 8.53 ct/kWh. Offshore wind parks that commission by 2017 will receive 15 ct/kWh for an initial period of 12 years. Those that begin operating in 2019, however, will receive only 12.97 ct/kWh.

Besides degression, other tariff components exist, such as the so-called technology bonus and repowering bonus. The entire system of feed-in tariffs is very complex and depends on various factors that require specific expertise to understand. In any case, it should be emphasized that EEG 2012 encourages early investment to achieve its legislative goals: the sooner an installation starts the generation of energy, the more the operator will receive over the next 20 years.

Even though offshore wind is currently seen as the major renewable energy source of the future, there will also be massive demand for onshore wind parks. In particular, the federal states of Baden-Wuerttemberg and Bayern have decided to greatly increase power generation from wind energy. Baden-Wuerttemberg, for example, plans to grow the share of its wind-generated energy from below 1 percent of its total power currently to 10 percent in 2020.

EEG 2012 regulates the grid connection system for renewable energy power plants. It does this by obliging grid operators to connect a renewable energy source with that point on their system (the "grid connection point") that is, inter alia, at the shortest linear distance from the source installation's location. As a result, renewable energy plants are granted preferential grid connections in comparison to conventional energy sources. The renewable energy producer, however, must pay the costs incurred by connecting the plant to the grid connection point. Germany's revised Combined Heat and Power Act (KWK Gesetz) 2012 provides a similar compensation scheme to support energy production by cogeneration.

Finally, the German government has established a special funding program (the Offshore Wind Energy program) through its KfW bank group. The program provides €5 billion in order to support construction of the first 10 offshore wind farms in Germany.

Get the full Issue of Global Energy Industry Review.

More News and Articles from our Global Energy Group.

Learn more about our Energy practice.

Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe – Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.

© Copyright 2011. The Mayer Brown Practices. All rights reserved.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions