New German coalition aims to slow new wind capacity growth

11 November 2013 16:16 Source:ICIS

Germany’s new coalition government plans to shake up the country’s renewable energy regime, aiming to cut its offshore wind power capacity goals and to reduce overcapacity at conventional power plants. At the same time, the government is set to increase the share of renewable electricity in the power mix to 40% by 2020 from the 35% previously planned.

Over the weekend, more details about the reform bill of the renewable energy subsidy scheme emerged. The bill should be presented to the German parliament by easter 2014.

“It is the biggest reform of the EEG [renewable energy law] since it came into existence over 10 years ago,” Germany’s environment minister Peter Altmaier said at a joint press conference on Saturday with Hannelore Kraft, state minister-president of North-Rhine Westphalia. The two are leading the working group for energy during the coalition talks.

The expansion of renewable power is to follow growth corridors, Altmaier and Kraft said.

Which rate of growth these corridors should follow is still being worked on, the two politicians added.

Power mix changes

The parties agreed on a 40% renewable power production goal in the power mix by 2020, up from the previous 35%.

But while the SPD wants to achieve a 75% share of renewables in the power mix until 2030, the CDU/CSU is aiming for 55%.

The energy working group, in which the CDU/CSU and the SPD parties set out the policy goals for the future coalition government, agreed to focus onshore wind capacity growth on areas with high wind levels.

This is likely to mean less wind power capacity being built in southern states. However, even in the areas with high wind capacity such as northern parts of Germany, the remuneration is due to be cut drastically.

“We want to reduce [too] excessive subsidies,” Kraft said. However, existing renewable power plants will not be impacted by the reform bill.

Furthermore, the offshore wind power capacity goal has been cut to a “more realistic” 6.5GW by 2020, Kraft said. The previous government’s goal of 10GW has long been doubted by the industry ( see EDEM 14 October 2013 ).

A total of 15GW of offshore wind capacity is now expected by 2030, instead of the original goal of 25GW, with two offshore wind parks to be built from 2021 onwards, Kraft said.

Subsidies changes

Renewable plant operators will no longer be compensated when their production needs to be stopped because of oversupply, Kraft added.

No major adjustments were made for solar power subsidies where drastic cuts have already been implemented. “For biomass we only see very limited subsidy possibilities,” Kraft said.

With the exception of small solar power panels installed on the roofs of houses, all new renewable electricity plants will be developed “step by step” under mandatory direct marketing for renewables.

New larger renewable power plants will have to sell their output directly on the exchange. There will be a transition phase for wind power plants of up to 5MW installed capacity, but by 2018, they too should enter the market, Altmaier added.

The potential new government also wants to test a tender model for renewable capacity in a pilot project. If successful, such a model would not be implemented before 2018, Altmaier clarified.

Neither Altmaier nor Kraft mentioned a capacity market mechanism for conventional power plants, but said that they want to develop further the grid reserve or winter reserve which is currently in place to ensure the security of supply mainly in southern Germany.

“We agree that we want to remove regional supply bottlenecks,” Altmaier said.

However, there is overcapacity in Germany overall which had to be reduced, he added.

Last week, it emerged that the parties agreed in favour of a backloading of 900m emission certificates ( see sister publication EDCM 4 November 2013 ). Martin Degen

By Martin Degen