Germany is reforming renewable energy

A long and complicated discussion of the law on renewable energy sources in Germany came to end in June 2016, and the Parliament passed this controversial document.

The main reform is that a strict bidding system is introduced for new renewable energy facilities and, starting from 2017, only the least costly projects will get governmental subsidies. This means that a company will have to compete on the open market instead of simply acquiring subsidies for any renewable energy facility. Energy suppliers will have to qualify for subsidies through an open bidding system, at the same time a maximum limit for subsidies for each facility of the declared installed capacity is introduced.

The opponents of the new reform argue that the accepted norms threaten to stop the development of the renewable sector. The country has come a long way to increase the share of RES in the energy balance from 6% in 2000 to nearly a third today, which certainly made Germany a leader in this field. The German government envisages an increase in the share of RES to 45% by 2025, and up to 80% by mid-century, serving as a model to the EU neighbours and to the entire world community.

Dolf Gielen, the Director of IRENA (International Renewable Energy Agency) Center on Innovation and Technology in Bonn (Germany), does not agree with the negative views, “While the fixed feed-in tariffs have become very successful for the large-scale development of renewable energy sources, they were not at all successful with regard to cost management. The reform will rebuild Germany in accordance with the global trends that we see today: the transition from feed-in tariffs to the bidding sales system. In this regard, Germany is lagging behind at the moment. And the development of renewable energy sources will become more predictable in the framework of the new system.”

The supporters of the reform believe that the renewable energy supply glut due to excess production caused difficulties for the industry and has created the atmosphere of uncertainty for energy suppliers. The changes are supposed to build a confident and stable platform in the European energy market as a whole. Moving renewable energy sources to the market system will put an end to the general feeling that they are getting unfair compensation. In addition, the transition to the bidding system will break the stereotype that renewables are too expensive.

Regarding wind power, state support will include a new accounting model for wind characteristics of different platforms. The amount of subsidy will be determined by special stimulating factor, which will take into account wind potential in certain regions. Thus, an optimal competitive environment for all regions of the country will be built, not only supporting wind power in regions with maximum annual wind speed.

“The reform has become another step towards the integration of wind power in the overall energy market. This integration will enable wind power to become a major source of energy,” comments on the new law Tony Adam, Director of Public Relations for the German wind turbine manufacturer Nordex. “In general, the bidding model for wind power is very positive, as it provides the further development of the sector on the whole territory of Germany.”

The support system of “green energy” in Germany will be completely transformed in 2017.

As for the projects that have already received a building permit before the end of 2016, a mild stepwise system of transition to the new rates will apply.


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