German onshore wind power to grow by 3-4GW in 2016 – BWE

German onshore wind power generation capacity is likely to increase by around 3-4GW this year driven by subsidy reform, exceeding targets in the process, the country’s wind industry association BWE said on Monday.

“The change of the subsidy system to tenders might mean the expansion will be quite strong this year,” a BWE spokesman said.

The German economic affairs ministry plans to shift almost all wind power subsidies and a large chunk of solar subsidies from existing guaranteed payments to tenders, under which projects compete for financial support. This is expected to reduce the burden of funding renewables expansion on consumers’ electricity bills.

However it is not a switch to a preferential model that will drive the increase in installed capacity, but the fact that developers are likely to speed up work on their wind projects to get them in place before the tenders are introduced, the spokesman said.

Exceeding targets

Last year, Germany’s onshore wind capacity grew by 3.5GW, exceeding once again a 2.4-2.6GW target set by the state.

Offshore wind capacity too has grown quickly and is expected to exceed its 2020 target before the decade is out (see EDEM 20 May 2015).

The energy ministry has proposed an interim target for offshore wind to ensure it does not exceed its 2030 target of 15GW. The total offshore capacity could be up to 11GW in 2025, it has proposed.

One of the biggest German offshore parks coming online this decade is the 497MW Hohe See. Its developer, German utility EnBW said on Monday it has signed an agreement for the supply and installation of turbines for the park with engineering company Siemens. EnBW plans to make the final investment decision for the park this year.

Quick wind power expansion will continue putting pressure on Germany wholesale electricity prices, which have in recent months fallen to lows many had not expected.

Legal draft delayed

Onshore wind projects that get an environmental permit by the end of this year and come online by the end of 2018 are still eligible for subsidies under the existing system, according to key points about forthcoming renewable energy law changes the ministry has published.

However, as the proposals might yet change in the political process, it is hard to predict how tinkering with the renewable energy law could affect installed capacity expansion this year, as well as after the laws have come into force, the BWE spokesman said.

However, under the new system in the near future, it seems unlikely that Germany will have as high onshore wind expansion as it did in 2014-15, the spokesman said.

The ministry has said tendered onshore volume would be adjusted to make sure Germany will reach its target of meeting 40-45% of its power consumption with renewables by 2025 and that the tendered volume would not be less than 2GW annually.

The publication of a formal legislative draft for upcoming renewable energy law changes has already been delayed. The ministry initially expected to publish it in January.

The draft will be published for consultation with federal states and energy industry associations in coming weeks, after discussions within the government have ended, a spokeswoman for the ministry said. The ministry expects parliament to approve the changes this year.

Proposal updates

Experts have said the tender system might force smaller developers out of the market. In response to such fears, the ministry said in updated proposals published last week that local citizen cooperatives could participate in onshore tenders under less stringent terms. They would not have to submit an environmental permit to participate and they would be given more time to realise their projects.

To relieve the fears that Germany’s existing biomass plants would close after their 20-year feed-in-tariff periods end (see EDEM 13 October 2015), the ministry has said that in the medium term, tenders for both existing and new biomass plants would be introduced. laura.raus@icis.com