German green energy forced onto exchange one year early

25 June 2014 11:40 Source:ICIS

It could become mandatory for power generators based in Germany to sell any subsidised renewable electricity on the European Energy Exchange (EEX) in 2016, one year earlier than previously planned. This emerged in an amended proposal approved by an energy and economic committee in the lower house of parliament on Tuesday night.

The move is aimed at cutting down on an excess of wind and solar power, by making sure that the companies producing this kind of energy respond to market prices rather than a fixed feed-in tariff paid for all the power they send onto the grid.

All companies producing subsidised renewable energy, except grid operators, would have to do this so-called direct marketing for power produced by installations with capacity of more than 100kWh from 2016 according to the parliament committee ( see EDEM 22 January 2014 ).

The amended proposal also includes a surcharge for electricity generated for a company’s own consumption, independently from the public grid.

There has been a trend in Germany for companies to produce power for their own consumption, as this generation has so far been exempt from the renewable power surcharge.

This trend in combination with better efficiency measures is likely to have played a role in falling power consumption over recent years, despite economic growth. In 2013, total power consumption in the public grid stood at 598TWh, slightly below the 2003 level of 601TWh.

According to an estimate from grid operators, power produced for own consumption is expected to reach 47TWh in 2014 with the vast majority – 44TWh – accounted for by industry rather than private households.

The committee proposed to charge all new generation assets, built after August this, 40% of the renewable energy subsidy charge by 2017. Assets which do not run on renewable power or combined heat and power technology will pay the full surcharge.

For now existing generation assets used for own consumption will not be charged, but the committee agreed to reconsider this in 2017 and could then retroactively charge companies for these assets.

Especially the last point is fiercely criticised by industry associations which are saying that already made investments need legal protection.

The amended reform bill could be implemented on 1 August but still needs to be passed by the upper house of the parliament. Questions also remain about whether certain aspects of the reform bill such as exemptions from the surcharge for energy intensive companies are compliant with EU state aid regulation. Martin Degen

By Martin Degen