Government Passes Ordinance Cutting Management Premium for Wind and Solar Power

Yesterday the government passed an ordinance that cuts the management premium pursuant the Renewable Energy Sources Act (EEG) for  for solar and wind power as of 1 January 2013.

The management premium is an element of the market premium that producers of renewable energy receive if they do not claim feed-in tariffs, but market the electricity themselves (Section 33g EEG). It covers transactional costs like the cost for the listing at the energy exchange and other trading related costs as well as the costs for forecast errors regarding the actual amount of energy fed into the grid.

When introducing the market premium with the EEG 2012 amendment, the government anticipated lower costs than have actually arisen. Costs for the market premium are eventually borne by electricity consumers. They form part of the EEG surcharge, which has risen continuously over the past years and is expected to rise further, increasing the prices for electricity in Germany. The „Ordinance regarding the amount of management premium for electricity from wind energy and solar energy” would reduce costs for consumers by approximately EUR 160 million per calendar year, Environment Minister Peter Altmaier said upon its presentation.

The ordinance, which still has to be approved by Parliament, will reduce the management premium by 0.35 ct/kWh for solar power as well as onshore and offshore wind power as of 1 January 2013. The reduction applies to renewable power plants that already market directly as well as plants that decide to market directly in the future. Further reductions will take effect in the following years, so that the premium would amount to

  • 0.65 ct/kWh in 2013;
  • 0.45 ct/kWh in 2014;
  • 0.30 ct/kWh as of 2015.
For remote-controlled wind and solar power plants the premium shall only be reduced by 0.25 ct/kWh, providing an incentive to install remote controls, which facilitate a demand-based operation of the plants. The premium shall amount to
  • 0.75 ct/kWh in 2013;
  • 0.60 ct/kWh in 2014;
  • 0.50 ct/kWh as of 2015.
As yet it is still unclear when Parliament will decide about the ordinance.

Source: Federal Ministry for the Environment, Nature Conservation and Nuclear Safety

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