Gabriel concession on offshore FIT

Sigmar Gabriel

Sigmar Gabriel

German energy minister Sigmar Gabriel has agreed to a less steep degression in offshore wind feed-in tariffs (FITs) after 2020.

The concession comes in a private letter to the deputy floor-leader of the governing Christian Democratic Union (CDU), seen by Recharge.

Instead of a decline in regular FITs of one euro cent ($0.0137) per kilowatt hour each year, Gabriel in his letter to Michael Fuchs – who is also a CDU energy expert – said he would support a reduction of only €0.005 per kWh from 2020 onwards.

That position had been proposed by Germany's coastal Northern states, in order to guarantee the continuing attractiveness of the support mechanism.

Offshore operators through to the end of the decade can choose between the so-called basic model of FITs and the "compression model."

In the basic model, initial FITs of currently €0.154 are paid for the first 12 years of operation of a wind park at sea, before dropping to a minimal FIT for another eight years. Initial basic-model FITs according to government plans will drop to €0.139 in 2020.

In a previous draft, they would then go down to €0.129 in 2021, etc. According to Gabriel's new plan, they would only drop to €0.134 in 2021, to €0.129 in 2022, etc.

In the compression model, a much higher FIT of €0.194 is paid for the first eight years, to be followed by a much lower tariff for the subsequent 12 years of operation.

In the wake of a reform of Germany's Renewable Energies Act (EEG), Gabriel had already conceded an extension of the compression model through the end of 2019.

The compression model would otherwise have expired at the end of 2017, leading to complaints by the industry that elevated upfront costs could not be met unless the compression model were to be extended.

The basic model of FITs in any case will be the only one valid from 2020 onwards, according to current plans.

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