German ministry plans 2.5GW onshore wind subsidy cap

Germany’s economic affairs ministry proposed a 2.5GW annual gap on new subsidised onshore wind power capacity, which is likely to slow down wind power expansion.

The proposal is made in the draft new renewable energy law published on Friday.

Germany has a target to increase onshore wind capacity 2.4-2.6GW annually, but the expansion has been quicker recently, amounting to 3.5GW last year.

Germany’s solar power expansion meanwhile lags behind its 2.4-2.6GW annual target, with just 1.4GW installed from March 2015 to February this year. This has been compensated by onshore wind expansion exceeding its target. By pushing wind power expansion back inside its target range, the new renewable energy law might reduce the bearish pressure renewables are putting on Germany’s wholesale electricity prices.

Open points

With the renewable energy law amendments, the government plans to shift almost all wind power subsidies and a large chunk of solar subsidies from guaranteed payments to tenders, which make new projects compete for financial support.

In November, the ministry had said onshore wind tender volume would be adjusted without any gap based on progress towards achieving Germany’s target to meet 40-45% of its power consumption with renewables in 2025 (see EDEM 24 November 2015).

Tendered onshore wind volume will be based on progress towards meeting the targets also according to the draft law, but it would have to remain in a certain range. The ministry has not yet decided what could be the minimum annual tendered volume.

“There are still a number of open points,” a spokeswoman for the ministry said about the draft, which the ministry had previously expected to publish in January.

Law delayed

Some points about the new law will be decided and clarified in consultations with energy industry unions and Germany’s federal states, which the ministry launched on Thursday.

The ministry expects these consultations to last one to two weeks, after which the government would approve the draft. The parliament is likely to pass the law in autumn, the spokeswoman said. Previously, the ministry had expected the parliament to pass the law before its summer break.

According to the ministry’s proposals, wind and solar power plants with capacity up to 1MW will be excluded from tenders and remain in the subsidy system outlined in the renewable energy law approved in 2014. Annual solar power tender volume will be 500MW. There will be centralised tenders for offshore wind power that should ensure Germany will reach its target to have 6.5GW of offshore capacity by 2020. laura.raus@icis.com