Germany Hits Brakes to Slow Renewable Energy Expansion

Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Germany has approved changes to its Renewable Energy Sources Act designed to rein in the uncontrolled expansion of renewable energy experienced in recent years.

The changes, approved by the upper (Bundesrat) and lower (Bundestag) legislative chambers, include scrapping the existing Feed-in-Tariff (FiT) system of subsidies for renewable energy projects in favour of competitive power auctions, similar to those now used in countries like the U.K. The lawmakers have also agreed to limit the annual auctions for onshore wind to 2.8 gigawatts (GW) while offering fluctuating tenders for offshore wind in order to control renewables growth in the coming decade. The limits are designed to allow the transmission network to catch up with the massive surge in windfarm development since the country opted to ditch nuclear power in 2011 and introduced generous incentives for renewables projects. For additional information, see May 30, 2011, article--Germany Votes to Dump Nuclear Power.

The onshore cap will stay in place until 2020 and may be increased to 2.9 GW a year after that, while the offshore cap will remain in place from 2021 to 2030. Caps will also be implemented to control the rollout of solar power and biogas projects.

The government's tactics have been criticised by the country's Renewable Energy Federation.

"No one in the world understands why the German government has decided that now, as photovoltaic and wind are becoming cheaper and renewable energy is booming worldwide, is the time to weaken the pace of expansion in the home country of the energy transition," said Managing Director, Dr. Hermann Falk. "The policy should support the renewable industry not throw spanners in the works. The changes by the government is a setback for the urgently needed transition to a climate-friendly and sustainable energy supply."

Giles Dickson, chief executive officer of European wind industry group, WindEurope, added:"The shift from feed-in tariffs to tenders is a trend we are seeing across Europe. Germany's move was to be expected as European Union (EU) member states bring their support schemes into line with the European Commission's state aid guidelines. For onshore wind, the reforms set out clear volumes for wind energy deployment toward 2020 and beyond. This gives the industry a degree of certainty on investments and the opportunity to plan into the future. The same cannot be said for offshore where there is a lack of stability in the volumes. The build out rate after 2020 will be uneven as the auctions vary in size from year to year. The volumes are also less ambitious than other member states such as the U.K, which has committed to 1GW a year to 2030 and the Netherlands, which will tender 1.4GW this year and then a further 700MW each year to 2020."

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