23 Apr 2015, 00:00
Ellen Thalman

German solar array auction “well-received”, bids 9-10 cents per kWh

Bids for solar panel auctions were well-received, Germany is not exiting coal, and the country should consider its European electricity trading partners when designing the new power market, a key member of the economics ministry said at an industry event in Berlin.

Germany’s recently completed auction for solar array subsidies, “was very well received,” according to the state secretary in the Ministry for Economic Affairs and Energy Rainer Baake, who said Thursday  that the first prices in the tenders for ground-mounted solar arrays were between 9 and 10 cents per kilowatt-hour, which is "what we had expected.”

The government and the Federal Network Agency (Bundesnetzagentur) said this week that the  auction was completed on 15 April, with 170 bids for 150 megawatts of photovoltaic capacity. The lowest bids will be awarded the contracts. The results are expected in the next two weeks.

The next round of tenders will start on 1 August 2015. Germany changed the investment subsidy system for large photovoltaic installations in August 2014 from feed-in tariffs set by policy makers to the new auction system. The idea was to introduce market elements for renewable energy sources. Such a system is under consideration for wind power as well.

“When we examine the tenders next week, we will then know the winners and then we will see what the average price is that will now be paid,” Baake said. “The important thing is that it now moves to a competitive situation.” Baake spoke at an event of the VDMA German Machine and Plant-building Association.

"Climate levy not a coal exit"

Baake also noted that the German government’s plans for a climate levy on old coal-fired plants “is truly not a coal-exit.” He stressed that industry was welcome to submit proposals for changes.

“We are open for every alternative, it should be a rational discussion,” he said. “We want mechanisms that are in the interest of the economy.”

In order to reach its target of cutting greenhouse gas emissions 40 percent by 2020 over 1990 levels, the government is asking the power sector to save 22 million tonnes of the 87 million tonnes of CO2 needed to reach the target. A levy on the old, coal-fired plants would charge them for emitting more than a certain amount of CO2.

Power market reform must consider European context

Turning to recent discussions over a new design for the power market, which is aimed at ensuring security of supply in the coming years, Baake said that Germany must take into consideration its electricity trading partners. Creating a regional power market with around 10 of its European Union neighbors would be one way to ensure realiability as Germany moves to a larger share of fluctuating, renewable power.

Taking the route of a domestic “capacity market” would only secure supply in Germany, he said. “But that is ignoring the European internal market,” he said, “It only makes sense to look at security of supply in a European context.”

“If we are talking about security of supply then there is one thing we surely do not need to change, namely that power must remain reliably accessible.” By international comparison, Germany is the “world champion” at under 15 minutes power outage per consumer per year. In the US, companies have to deal with hundreds of minutes of blackouts, he noted.

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