German cabinet OKs RE draft

Despite their political differences, Angela Merkel and Sigmar Gabriel have an excellent working relationship

Angela Merkel and her energy minister Sigmar Gabriel

Germany’s cabinet has approved outline reforms of the Renewable Energies Act (EEG) drafted by energy minister Sigmar Gabriel that spell out steep cuts to support in an attempt to contain costs, as reported by Recharge earlier this week.

An updated outline seen by Recharge and okayed at an extraordinary cabinet meeting at Meseberg castle outside Berlin foresees a lowering of the support for onshore wind as well as a cap on its expansion, additional cuts to feed-in tariffs (FITs) for offshore wind, further hardship for PV, and the introduction of tenders.

German Chancellor Angela Merkel explicitly backed Gabriel’s reform proposals, calling the Energiewende – Germany’s shift from nuclear to renewables – a “project of the entire federal government.”

An affordable and ecologically-friendly energy supply as well as securing Germany’s economic power is among the challenges of her government, she said at the beginning of the cabinet meeting.

The government wants to present the EEG reform to both houses of parliament in April. If approved, the amended legislation would come into force on August 1, 2014, but additional cuts to RE support would only start next year to safeguard planning security.

In the outline paper, Gabriel suggests cuts to support for onshore wind from 2015 of between 10% and 20% from 2013 levels at strong-wind locations, to reduce what is perceived as “excessive support”.

Feed-in tariffs (FITs) for new onshore wind parks in Germany currently average close to €0.09 ($0.12) per kilowatt hour.

On top of that, the paper envisages a yearly flexible cap of between 2.4GW and 2.6GW to new onshore wind capacity beyond which support will fall faster – similar to the annual limit already existing for PV that was introduced in 2012.

On the upside, if less than 2.4GW is installed, quarterly degression will actually be less severe.

Renewables groups and German coastal states have rejected the cut in support for onshore wind energy as choking off one of the cheapest forms of RE.

For offshore wind, the government wants to extend the current so-called compression model for FITs until the end of 2019 as previously promised. But the outline also stipulates a cut in initial support by €0.01 per kWh each year in 2018 and 2019 that wasn’t on the books before.

Offshore wind parks commissioned in 2017 will thus receive an initial FIT of €0.19 per kilowatt hour of electricity produced if opting for the compression model. That goes down to €0.18 per kWh in 2018 and €0.17 per kWh in 2019.

The outline confirms a new 6.5GW target for offshore wind for 2020. After that, the government is considering arranging the further build-up of offshore wind via tenders, eying the construction of only two offshore plants per year between 2020 and 2030.

Gabriel also wants to force owners of renewable installations above a certain size that are used for self-consumption to also pay a 70% of a surcharge currently only levied on electricity that is bought from the grid.

The measure may especially affect PV, as hundreds of thousands of Germans have solar installations on their roofs and companies increasingly install modules on their facilities to lower energy bills.

The draft reforms also include a cap of Germany’s overall renewables expansion to 45% by 2025, and to 60% by 2035, as already suggested in the coalition contract between the SPD and Chancellor Angela Merkel’s Christian Democrats (CSU) and her Bavarian allies, the Christian Social Union (CSU).

From 2017 on, Gabriel’s outline proposal foresees tenders for a total of 400MW in ground-based PV arrays annually, in a test that could be extended to other RE technologies later if successful.

The reform is also foreseen to limit the expansion of bioenergy to a mere 100MW a year, as biomass technologies, which currently are one of the pillars of German renewables output, are deemed too expensive.

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