06 Jan 2021, 11:52
Julian Wettengel

German renewables reform could lead to downward spiral of wind auction bids – official

Tagesspiegel Background

A late addition to the recent German renewables law reform could lead to a continuously decreasing number of bids in the country’s wind power support auctions, reports Steven Hanke for Tagesspiegel Background. The parliamentary economic committee had introduced a provision that would allow the regulator (BNetzA) to decrease an auction’s volume two weeks before the due date, should it become clear that it would be undersubscribed (“endogenous rationing”). Such a retroactive tightening is meant to ensure there is still enough competition to keep prices low. However, research showed that the uncertainty in the process could lead to operators not participating in the first place, kicking off a downward spiral of bids, according to experts such as economy ministry official Volker Hoppenbrock. In a now-deleted tweet, he claimed the “worst” aspect of the renewables reform is not unambitious expansion plans, but the provision on endogenous rationing, reports Tagesspiegel. Christoph Maurer, managing director at consultancy Consentec, called the decision “disastrous” and NGO Environmental Action Germany (DUH) managing director Sascha Müller Kraenner said it “deliberately stifles” the much-needed expansion of wind energy.

After some delay, the German parliament passed the latest reform of the Renewable Energy Act (EEG) in December 2020. The law specifies a timeline of tenders for renewable power installation additions until 2028. However, it was quickly criticised as lacking vision, being a “bureaucratic monster,” and for the fact that key decisions on more ambitious expansion plans were postponed to 2021.

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