Reactions to the Renewable Energy Act reform 2016

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Germany is giving its main renewables support scheme, the Renewable Energy Act (EEG), a major overhaul, aiming to streamline the growth of renewables and to reduce costs for consumers. But the plans, including a switch from feed-in tariffs to auctions for clean energy installations, are hugely controversial. The following is a collection of stakeholder comments and recommendations regarding the 2016 EEG reform. [UPDATE with new comments after passage of reform]

Greenpeace

“The EEG reform drives forward Germany's dismantling of the Paris Agreement”

The EEG is "exactly the opposite of what Paris demands from Germany", writes Greenpeace energy expert Tobias Austrup. "Germany needs more electricity for e-mobility and heating in the future, which is why we need more renewable energies. This law, with its senseless development caps, its untested auction system, and arbitrary harassment of wind energy will result in a slowdown of the energy transition."

 

TenneT

“Speedy grid extension needed despite decelerated wind power development”

Transmission grid operator TenneT calls the reform a “step in the right direction”, but demands a speedy expansion of the German electricity grid to transport the wind power generated in the north and avoid higher costs for consumers and an unstable supply. TenneT emphasises that delays in the planning phase should be avoided: “It is important that we have efficient permit procedures,” said Lex Hartman of the company management in a press release.

Read the press release in German here.

 

German Offshore Wind Energy Foundation

"EEG reform endangers value creation and employment"

The German Offshore Wind Energy Foundation criticises that the EEG reform reduces the yearly offshore wind power capacity additions after 2020 more than originally planned. In 2021/22, 500 megawatts will be put up for auction, as opposed to previous plans of 730 megawatts. “A reduced volume of development endangers not only reaching the national and international climate targets, but also has fatal consequences for the value creation and employment,” writes the foundation in a press release.

Read the press release in German here.

 

Cologne Institute for Economic Research (IW)

“A little more market”

Regardless of what critics say, the reforms do not herald the end of the Energiewende, because support for renewables will continue, according to the Cologne Institute for Economic Research. There is no hope the renewable surcharge paid by consumers will decrease. “But at least the rise of the surcharge could be slowed.” The Institute argues the reform squanders the opportunity for a real cost reduction by letting renewable technologies compete with each other in tenders. “The new EEG is a first and important step in the direction of more competition. But again, there was not enough courage for a real transformation. There is no end in sight for the subsidy jungle.

Read the press release in German here.

 

German Renewable Energy Federation (BEE)

“Clear slowing of the Energiewende, some improvement in the details”

The transition to auctions is a significant setback for a decentralised Energiewende, Hermann Falk, managing director of the German Renewable Energy Federation (BEE) said. „Until now, the EEG was an engine for the development of clean energies, but with today’s reform, it serves mainly to preserve fossil energies, and to significantly slow the speed of the Energiewende.” He added the last-minute changes to increase the changes of citizens’ cooperatives were improvements, but did not go far enough to keep small actors on board.

 

German Industry Initiative for Energy Efficiency (DENEFF)

“EEG reform is a major setback for energy efficiency”

Efficiency initiative DENEFF says extending renewable surcharge exemption for energy-intensive industries without tying them to energy efficiency gains will make many investments in energy-saving measures uneconomical. It also says limiting the renewable energy surcharge for energy-intensive industries without demanding efficiency investments would increase power costs for all other consumers. “Renewable surcharge exceptions for Industry should be tied to efficiency improvements,” said Claudia Kemfert from the German Institute for Economic Research (DIW), who serves on DENEFF’s advisory board. “It’s counterproductive if a company can only enjoy rebates if it consumes a lot of energy. It should be the other way around.”

Find the press release in German here.

 

Please note: The following comments were made in the run up to the vote in parliament, ahead of some minor last-minute changes to the draft:

 

Eurosolar

“Don’t impede small and medium-sized companies through red tape”

European renewables association Eurosolar says the switch to auctions in the reformed Renewable Energy Act (EEG) makes for “an extremely bureaucratic” instrument. It claimed the Act would impose “massive financing costs” on the small and medium-sized companies which wanted to invest in renewable facilities. The association told parliamentarians in an open letter that if they introduced the new tender system despite these flaws, it should at least make exceptions for small wind power installations with less than 3 megawatt capacity.

 

PwC

“A step in the right direction”

The EEG reform is essential and a step in the right direction - but it leaves much to be desired, argues Volker Breisig, partner utilities and regulation at PwC, which advises past and new energy suppliers and users. Breisig says the power market remains split between renewable - which are covered by the new EEG - and conventional generation, which is covered by the new power market design. “We still need a path to a fundamental transformation of the energy system.”
It remains uncertain as to whether the reform allows precise steering of green power development, he adds: “Especially the rising complexity and an increase in risk could slow development […] My feeling is that auctions will lower costs, but we have no idea yet how high the risk premium will be […] It will become more complex, which will in principle help large companies. It is definitely a professionalisation of renewable development.”   

 

German Wind Energy Association (BWE)

Wind industry calls for exemptions for small projects and larger auction volumes

The German Wind Energy Association (BWE) continues to reject the transition to auctions. It calls on lawmakers to introduce exemptions for small citizen wind parks, saying EU rules would allow exemptions for projects with a capacity of up to 18 MW. “In addition, a correction of the auction volumes is necessary.” The BWE argues that the capacity of projects which win at auction but are not realised should be added to later auctions. “Otherwise, there is a risk that real development will lag behind specified levels.”

 

Federation of German Industries (BDI)

“Steps long overdue”

The now-agreed upon key points are “steps long overdue” to steer the Energiewende, says Ulrich Grillo, president of the Federation of German Industries (BDI). He also criticised the opposition from some states, saying: “By no means should state egoism be allowed to dictate the extent of future additional capacity [of renewable power].”

 

German Association of Energy and Water Industries (BDEW)

Right move to switch from feed-in tariffs to auctions

Stefan Kapferer, head of the Association of Energy and Water Industries (BDEW), said his organisation welcomed the switch from feed-in tariffs to renewables. “Like all other power producers, they [renewables] have to gear their input to the needs of the whole system,” he said. The government’s attempt to have a more cost-efficient energy transition should not be unmade by generous exemptions for small solar PV installations, Kapferer said.

 

Deutsche Umwelthilfe (DUH)

“Use wind power alternatively instead of stopping wind development”

Environmental NGO Deutsche Umwelthilfe (DUH) has asked parliamentarians to make changes to the EEG draft law, so that wind power expansion would not be curbed in the so-called “grid congestion areas”. According to the DUH, grid bottlenecks are no reason to reduce onshore wind development – excess wind power should be used in other sectors like heating and mobility. More, not fewer, renewables would be necessary to reach Germany’s climate targets.

 

German association for bioenergy (BBE) et al.

“Energiewende needs bioenergy in the EEG”

The German association for bioenergy (BBE), the German farmers association (FvB) and other bioenergy organisations have called for changes to the auction design for biomass plants in the EEG. Small biogas plants on farms should not be lumped together with larger waste-based facilities. They should be able to compete with the bigger ones under adjusted rules. If small biomass plants with a capacity of less than 150 kW are not included in the auction scheme, they would be unable to continue working once their 20-year guaranteed feed-in tariffs were running out.

 

Trade Union IG BCE

EEG reform suspends the principle of “whatever cost”

Michael Vassiliadis, the chairman of the IG BCE trade union for mining, chemicals and energy industries, says he welcomed that the “existing EEG principle ‘whatever the cost’ will be suspended”, according to an IG BCE press release. It would only be fair if the profiteers of the support system gave their share to advance the Energiewende, he added.

 

WWF

“Clear thwarting of the energy transition”

The World Wildlife Fund (WWF) Germany calls the deployment corridor of 2,800 MW of onshore wind power a “clear thwarting of the energy transition”. It was ineffective to “take hostage the renewables development for a dragged-out grid expansion”, writes the WWF.

 

German Chemicals Industry Association (VCI)

First step for more efficiency in the Energiewende

The key points on the EEG reform are a first step for more efficiency regarding the Energiewende, writes the German Chemicals Industry Association (VCI) in a press release. “Up until now, renewable energies in Germany were driven forward regardless of costs, supply security and grid development. Germany cannot afford a ‘Keep it up!’” said VCI managing director Utz Tillmann.

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