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EEG 2.0: Further Information on Key Points of Reform of German Renewables Law

The cabinet retreat in Meseberg, Brandenburg, led to further clarification on the EEG 2.0 project, i.e. the reform of the German Renewables Law (EEG). The key point paper has been supplemented by an Annex to further specify intended modifications of the EEG. Besides the paper includes a protocol statement by three federal ministries regarding the planned changes relating to biomass.

1. Introduction of New Expansion Corridors/Caps in EEG and Cuts of Financial Support

As already mentioned, the key point paper wants to introduce expansion corridors with “breathing caps” (“atmender Deckel”) for the support of renewable power plants under the EEG. It wants to cut costs from an average financial support across all technologies of 17 ct/kWh under the currently applicable EEG to 12 ct/kWh for new installations by 2015. The 17 ct/kWh for existing installations and resulting from the “learning curve” will have to be paid off, as the government does not intend to retroactively alter previous grants.

According to the key point paper and the Annex, the following changes are planned.

a) Onshore wind power

b) Solar power

c) Biomass

d) Offshore wind power

e) Hydropower

f) Geothermal Energy

2. Greater Market Exposure of Renewable Power Plants

In order to expose renewable power plants more to market forces the key point paper and the Annex propose the following.

a) Binding Direct Marketing Obligation

b)  “Green Electricity Privilege” to Be Deleted

In December 2013 [2], the EU Commission has opened an in-depth investigate into the reduction on the renewables surcharge (EEG-surcharge) granted to suppliers that source 50% of their electricity portfolio from domestic renewable electricity (“green electricity privilege”). This privilege shall be deleted.

c)  Auctioning to Determine Financial Supports

3. Self-consumed Power

Power generated by a plant operator and consumed by himself shall contribute to the costs for grid expansion as follows:

4. European Law Context

The key point paper acknowledges that the EEG reform is “embedded in the European context”. The German Federal Government supports an internal  EU  legally binding climate target of at least 40% by 2030 within a target triad of greenhouse gas reduction, renewable energies and energy efficiency.

The EEG revision shall take place in parallel with the revision of the European state aid provisions regarding support of renewable energies. Even though the Federal Government does not consider the EEG to be state aid, it will consider the discussions on the European level and will actively participate in them. Because important concerns of the European Commission, for example better market integration of renewable energies, are also in the national interest. The Federal Government aims at achieving greatest possible coherence with the new state aid provisions. However, this also makes it necessary that the European legal framework shall be developed in such a way that it continues to enable support for renewables energies oriented on national realities, and that also in the future competitiveness of electricity intensive industries shall be ensured.

5. Next Steps

The key point paper confirms and specifies the schedule for the EEG reform already mentioned [3]:

Please note that the federal ministries for transport and digital infrastructure (BMVI), food and agriculture (BMEL) and for economic cooperation and development (BMZ) said in a statement published together with the key point paper that the aspects of the reform included in the Annex, which the Ministry for Economic Affairs and Energy (BMWi) submitted at short notice, needed to be further reviewed in the legislative process.

[amended/corrected]

Source: Bundesregierung [4]

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