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- The revision of the German Renewable Energy Act approved in June by 454 votes against 123 (mainly the Greens and the Left) entered into force during August. This new reform shall try control the expansion of green energy so the government can adapt its growth to the grid expansion, by adopting a series of measures which will make the German energy system more market oriented.
- The main issue of the reform is the elimination of the feed-in-tariff, which will be phased out entirely by 2018 and substituted with a bidding system; from 2017 the German government will auction off contracts for producers to generate set quantities. Moreover, the average incentive per kilowatt-hour will be reduced for new installations built after 2014, those with more than 500 kW of capacity will not receive any compensation once the reform is in force, while since 2016 those larger than 250kW and in 2017 those overpassing 100kW of capacity shall not be eligible to receive any remuneration. For example, subsidies for householders and firms which feed electricity from their own installations in the public power grid shall pass from 17 Euro cent per kilowatt-hour to 12 cents next year. Another measure is the definition of caps on the different renewable energy sectors which will mark the limit to which the feed-in-tariff will no longer apply, in the case of bioenergy it shall be 100MW.
- Furthermore, direct selling will be gradually introduced in order to facilitate the market integration of renewables, so therefore, grid operators shall not be forced by law to buy and sell renewable energy but the producers themselves, first the larger ones and over time the smaller ones, will have to directly sell its energy. What is more, generation for self-consumption will have to pay a part of the renewable surcharge too. So far, the generation of energy for self-consumption was exempt form the surcharges generated by the feed-in tariff. German companies will face strict criteria when applying for discounts on green energy surcharges paid by electricity users but energy-intensive industries shall be granted exemptions in order to remain competitive.
- The law reform establishes a set of goals to be reach in the long term, such as a share of renewable energy of 45% in the gross electricity consumption by 2025, which would rise to a 60% by 2035 and up to 80% by 2050.
- The European Commission has recently published its new rules on State Aid which will force Member States to replace energy subsidies by market-based mechanisms for all but the smallest clean elecricity generators by 2017.