FAZ/EWI Energy Conference: Oettinger on Harmonsation of Renewable Support, EEG Surcharge, Loop Flows, Capacity Markets

The EU Commission is becoming increasingly displeased with Germany’s energy policy and its lack of European coordination, the newspaper Frankfurter Allgemeine Zeitung (FAZ) writes. Climate protection and energy efficiency could be better promoted on a larger scale than by individual national measures, EU Energy Commissionar Günther Oettinger said at an energy conference organised by FAZ and the Institute of Energy Economics at the University of Cologne (EWI).

1. Harmonisation of Renewable Energy Support Schemes

Mr Oettinger and Peter Terium, CEO of the utility RWE, agreed that implementing the internal EU energy market and developing a coordinated policy for the promotion of green energy was a long-term task, FAZ said. Both men suggested that as a first step towards a pan-European policy a group of countries went ahead and agreed on joint market mechanisms and expansion targets for renewable energies. For this the market coupling in the Central Western Europe (CWE) region, which comprises Germany, France, Belgium, the Netherlands and Luxemburg, could be a model, they said.

2. Loop Flows

Mr Oettinger raised the question whether the priority with which renewable electricity has to be purchased and marketed by grid operators under the German Renewable Energy Sources Act (EEG) was compatible with the European Single Market. Excessive German (wind)power that could not be accommodated by the national grids caused loop flows to Poland and the Czech Republic, he pointed out. He showed a certain understanding for considerations by these countries to prevent loop flows by technical measures, FAZ said.

3. EEG Surcharge

Germany needed to reign in the costs for subsidising renewable energy, Mr Oettinger demanded. He warned that the EEG surcharge could otherwise not only rise from 3.592 ct/kWh in 2012 to approximately 5 ct/kWh in 2013 as widely predicted, but to 6 or 7 ct/kWh and including VAT something like 9 ct/kWh, endangering public support for renewable energy. With the EEG surcharge, consumers pay for the difference between the fixed feed-in tariffs paid pursuant to the EEG for renewable energy fed into the grids and the sale of the renewable energy by the transmission system operators (TSOs),

4. Capacity Markets

FAZ quoted Liberal state secretary at the Economics Ministry, Stefan Kapferer, as saying at the conference that Germany had to make do with a tight supply of operating reserve for at least three more winters (due to the shutdown of eight nuclear power plants in the wake of the Fukushima nuclear disaster). Since not enough new conventional capacities were being built in view of current wholesale prices (and the priority of renewable energy in German grids), one had to think about adequate financial incentives in the medium term (regarding such considerations please also see here). Mr Oettinger, however, made it clear that the Commission would review state aid for new conventional power plants very carefully, FAZ said.

Source: Frankfurter Allgemeine Zeitung; Welt

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