Germany to present new plans for renewables expansion, support schemes by early 2026 – official
Clean Energy Wire
Germany's coalition government is working on a comprehensive reform of the country's Renewable Energy Act (EEG) and plans to decide it in cabinet in early 2026, said Christian Schmidt, head of the electricity department in the economy and energy ministry. The reform would include a proposal on future expansion volumes for renewables and a new investment framework, including a mechanism to skim off windfall profits, said Schmidt at an energy conference by Tagesspiegel Background in Berlin. “Specifically, we are working on the implementation of two-way contracts for difference,” he said.
Germany must update its renewable energy support framework to bring it in line with new EU rules. Following a power market reform last year, the European Union requires that, from 1 January 2027, new state-backed support mechanisms to promote wind, solar, geothermal, hydro and nuclear power need to include a repayment clause to avoid possible over-funding.
When in use, expensive fossil power plants typically set the price for all producers on the wholesale electricity market, in line with the merit order principle. This means operators with low running costs, which includes renewables, can make substantial unexpected gains, also known as windfall profits. A clawback clause would set a ceiling on the amount of money new renewable power installations can make if they receive state support. Any profits beyond this ceiling would have to be returned to the state. Two-way contracts for difference (CfD) are one way to implement this.
However, implementing the EEG reform is expected to take time. Changes to the landmark regulation have to be negotiated and decided in parliament, and require state aid approval by the European Commission. “We are aware that project developers want planning security as quickly as possible and that changes can cause unrest in the market,” said Schmidt. “The aim is for the new investment framework to come into force by 1 January 2027.”
