German wind industry must confront this policy threat

The latest key parameters for Germany’s renewable energies have been available at the federal Ministry of Economic Affairs (MEA) since the beginning of December.

The main point contained in the document is that in future, a calculation formula is supposed to determine the highest capacity of renewables generators to be installed, so that the development target is not exceeded.

According to the coalition agreement, this represents a 40-45% share of power consumption until 2025. But there is a strange twist: originally, 45% was the minimum to be attained. Now, this figure has become the upper limit. This seems odd, especially in view of the climate targets agreed at COP21 in Paris.

And the German government says it made sure that the words “at least” were included in the EU target for reducing greenhouse gases by 40% by the year 2030. This was supposed to leave room for raising the target even higher.

The government’s latest proposition is not good news for the wind industry. Contrary to the pledge of a 2.5GW annual increase in onshore wind it made to the states in the 2014 Renewable Energy Sources Act, EEG, the MEA has reduced this to a gross figure of 2GW — ie, based on the volume of calls for tender. Past experience has shown that not all projects awarded are actually realised, which means we expect there will be even less expansion of wind than the base, which is already low.

This major slowdown in the Energiewende, or national energy transition, is a hard blow, especially coming directly after the Paris Agreement, the essential objective of which is a rapid move to renewable. The latest plans are nothing other than a 50% reduction of the government’s previous proposals.

It gets worse. In the MEA’s calculation formula, all renewable sources are assigned a fixed share in the annual volume of calls for tender. Wind gets only the remaining share necessary to reach the renewables target. The 2GW volume of calls for tender for onshore wind is only a minimum figure. To reach the development target, the amount of wind power could be much lower.

This also depends on the power generation of existing turbines. In good wind years, the required expansion could even be further reduced. If the federal government and the Bundestag leave out the new minimum volume and focus on maintaining the renewables target, further development of wind energy might, in the worst case, even drop to zero. The German wind sector in its present form would not survive such a measure.

This thriving industry employs more than 120,000 people. It is incomprehensible that it is being unnecessarily compromised in this way. After all, it is the last remaining renewables sector still intact after all the policy undermining of past years.

To drag it down along with PV and biogas means everything the industry has achieved at the political level would be destroyed. So we are still hoping that the government realises this and takes it into consideration in the wording of the final bill.

Advocates of onshore wind are aware that topics such as lack of infrastructure play an important role in the expansion targets. However, is undertaking such radical measures while at the same time banking on a tendering system the road to take? Who is supposed to bid if the expansion targets are not clearly defined?

In the past, the European Commission has exerted pressure on the provisions of the EEG in the energy transition, and in the case of tendering it worked in favour of the particularities of the German renewables sector. In its guidelines, the commission made provisions for special regulations that were explicitly designed to maintain a multiplicity of stakeholders in the domestic wind industry, which is made up mainly of small and medium-sized businesses. The so-called de minimis rule allows the federal government to exempt projects of up to six wind turbines of 6MW each.

Even the opportunity of keeping smaller planning offices in the market is of no interest to the federal government. If no special provisions are made, smaller planning offices will have to close or merge. This would make it difficult to ensure regional projects with high community participation. Without the de minimis rule, community-owned energy initiatives have practically no chance in a tendering system.

We are banking on continuing dialogue among associations and company representatives to achieve a rethink at the ministry in the months remaining before the EEG 2016 is passed. We must keep a secure and calculable Energiewende in mind, otherwise the transition is in jeopardy of being squelched, with negative consequences for a growing industry.

Hans-Dieter Kettwig is managing director of Enercon

This piece was published as part of the Thought Leaders series. Recharge’s Thought Leaders Club brings together leading thinkers and participants from the renewable-energy sector to examine the key challenges facing our industry