POWER May 2013 - 38

ENERGY POLICY
and 2.407¢/kWh in 2010. Meanwhile, the differential
cost between the compensation agreed
to under the EEG and the revenue from selling
renewable electricity supplied to the grid has
risen from €0.9 billion in 2000 to roughly €13
billion in 2011. Reports estimate that the average
German household currently pays €180
($242) per year to subsidize renewable energy,
highlighting that no upper limit on Germany's
subsidies for renewables has been set.
Responding to a renewed outcry about the
burden of the EEG on consumers, Environment
Minister Peter Altmaier and Economics
Minister Rösler proposed a short-term
amendment of the EEG to rein in runaway
costs, attempting to put a lid on the surcharge
at 5.28¢ through 2014 and limiting its rise to
2.5% per year beginning in 2015.
Critically, the measure includes a €1.2 billion
saving measure that would see FITs for
new renewables (with the exception of PV)
commissioned after August 2013 that would
2. Capacity on the German power grid. As of July 2012, Germany's total installed
generation capacity of 67.5 GW was characterized by 30.5 GW of net nominal solar power
capacity, followed by wind power at 29.3 GW. The two renewable sources soar well ahead of
hard coal's 20.5 GW, the third-highest installed capacity. More nonrenewable energy sources (a
total of 101.182 MW) were installed than renewable sources (71.181 MW), however. Sources:
Federal Network Agency, Federal Cartel Office
Geothermal energy
Sewage gas
Multiple energy sources (renewable)
Offshore wind
Landfill gas
Dammed water (excluding pumped storage)
Run of the river
Biomass
Onshore wind
Solar
Pit gas
Other energy sources (nonrenewable)
Waste
Mineral oil products
Pumped storage
Nuclear
Multiple energy sources (nonrenewable)
Brown coal
Natural gas
Hard coal
8
86
125
188
260
1,309
4,002
5,493
29,252
30,459
260
375
1,147
1,176
9,229
12,068
14,817
18,467
19,721
20,547
5,000 10,000 15,000 20,000 25,000 30,000 35,000
MW
3. Net total power generated in 2011. Of a total 551.4 TWh generated by German
power plants in 2011, renewable energy sources (in dark green) generated 115.2 TWh, or about
21%. Nonrenewable energy sources generated the remaining 435.2 TWh, led by brown coal
(21%), and followed by nuclear power (17%), hard coal (14%), and natural gas (11%). Sources:
Federal Network Agency, Federal Cartel Office
Offshore wind
Multiple energy sources (renewable)
Dammed water (excluding pumped storage)
Run of the river
Solar
Biomass
Onshore wind
Mineral oil products
Other energy sources (nonrenewable)
Waste
Pumpled storage
Natural gas
Multiple energy sources (nonrenewable)
Hard coal
Nuclear
Brown coal
38
20
40
4
5.8
5.9
9.1
60.6
61.1
79.5
95.7
114.5
60
TWh
www.powermag.com
80 100 120 140
0.6
1.7
1.8
15.5
19.3
28
48.3
be equal to the market value of electricity for
the first five months after commissioning and
slashes FITs for onshore wind power to 8¢/
kWh (compared to the current 8.8¢/kWh). For
all other existing plants commissioned before
August 2013, a 1.5% flat-rate reduction will
apply in 2014 and is limited to that year.
No changes are planned for PV, experts point
out, because existing policy mechanisms contain
a volume-responsive degression model designed
to keep annual PV installations within a
target " corridor " of 2.5 GW to 3.5 GW. PV rates
change on a monthly basis, and as of October
2012, degression is adjusted every three months
based on the amount of PV capacity installed
during the prior 12-month period. Exceeding the
target corridor sets off a standard decrease that
starts at 1% per month. This means, technically,
the FIT price could decrease by a maximum of
29% or increase by up to 6% over a 12-month
period. And it's working: Following a record 7.5
GW of new PV installations in 2011, new installations
fell three months in a row at the end of
2012-though last year still saw another record
of 7.6 GW in new PV installations (Germany's
FIT-eligible PV total in January 2013 was 32.7
GW). The 2012 record means solar FITs will
see a 2.2% reduction each month from February
to April 2013.
Although stakeholders seem to agree that
surging power prices could capsize Energiewende,
the proposal has been met with
skepticism by industry and lambasted by environmental
groups, which say it would massively
unsettle investors.
Experts, meanwhile have largely dismissed
the move by the two ministers as a ploy to
score points for conservatives running in the
upcoming Sept. 22 federal elections. " Altmaier's
plan is both, at best half-cooked, but also
clever. It does not address important topics
such as the further integration of renewables
into the German/European energy system,
the future design of the electricity market or
adverse distribution effects, " wrote Frankfurtbased
Deutsche Bank in a note to investors
in March. In light of the current SDP/Green
majority in the Bundesrat, moreover, " it is
doubtful whether the ruling CDU/CSU/FDP
coalition will be able to find the necessary
majorities for this proposal. In addition, the
constitutionality particularly of the proposed
1.5% reduction of feed-in tariffs for existing
plants in 2014 will surely be questioned, "
Dr. Matthias Lang, an energy lawyer at Bird
& Bird LLP in Düsseldorf and author of the
" German Energy Blog, " said in February.
Lang noted that the umbrella organization
of German industry (BDI) had also presented
a proposal to check rising EEG surcharges.
Among five measures it proposes are those that
abolish compensation that renewable generators
receive per the EEG if grid operators must
POWER | May 2013

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POWER May 2013

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