Will Bavarian EEG Demands and Status of Talks with Commission Affect EEG Reform Schedule?

The conservative CSU government of Bavaria adopted a list of demands for the reform of the Renewable Energy Sources Act (EEG) that differs from the reform proposal presented by Social Democrat Energy Minister Sigmar Gabriel, Süddeutsche Zeitung (SZ) writes. Besides, talks between Mr Gabriel and EU Competition Commissionar Joaquin Almunia on the future of the reductions granted to energy-intensive companies on the surcharge promoting renewable energy sources in Germany (“EEG-surcharge”) were stalled, Frankfurter Allgemeine Zeitung (FAZ) reports. This may affect the schedule for the adoption of the EEG amendment, envisaged for 8 April 2014 by Minster Gabriel.

1. Bavarian Demands for the EEG Reform Include Cap on EEG Surcharge

According to SZ, Bavaria in particular demands a cap on the EEG surcharge with which consumers pay for the difference between the feed-in tariffs paid pursuant to the EEG for renewable energy and the sale of the energy at the EPEX Spot power exchange by the transmission system operators (TSOs). Once the cap is reached, the Bavarian government wants to put a stop to the promotion of renewable energy, SZ says.

The EEG surcharge currently amounts to 6.24 ct/kWh. A cap at around 8 ct/kWh should be discussed, Bavarian Prime Minister, Horst Seehofer (CSU) told the paper, SZ says. The paper further writes that Bavarian Economics Minister Ilse Aigner (CSU) said the cap had to be determined in political talks. As the limit of what was bearable for citizens and enterprises has already been reached, future increases should be paid from the revenue obtained with the electricity tax.

The head of the Bavarian State Chancellery Christine Haderthauer said after the government meeting that Bavaria would only agree to the reform package if Bavarian interests were taken into consideration, SZ points out, saying she called the cap “a proposal for discussion”.

In contrast to a cap on the EEG surcharge, the draft bill presented by Mr Gabriel’s ministry includes “corridors” or caps of a certain range on the promotion of certain renewable energy sources, in particular onshore wind power and biomass, modifications of the tariffs, a direct marketing obligation and plans to determine future funding by auctions (for more information, please see here).

2. Talks with the EU on Future Exemptions of the EEG Surcharge for Energy-intensive Companies

Discussions between Mr Gabriel and EU Competition Commissioner Joaquin Almunia were reported to not have progressed decisively. According to FAZ, a meeting on Monday produced no tangible results. Mr Gabriel therefore cancelled a meeting with industry representative scheduled for Thursday, FAZ says. However, FAZ quotes commission sources as saying the meeting was not intended to reach a breakthrough. At a meeting in mid-February Mr Almunia had called the EEG reductions a difficult but manageable issue.

Particularly important for the EEG reform and the EEG reductions are new “Guidelines on environmental and energy State aid for 2014-2020“, the EU Commission intends to adopts. The draft guidelines have being presented and the Commission is in the process of coordinating them with the member states. According to FAZ, this process is not moving forward as planned. FAZ quotes unnamed sources as saying the talks were delayed, one might not be able to adopt the text as intended on 9 April 2014. It remained an open questions whether this would influence the adoption of the EEG amendment, FAZ says.

Source: Süddeutsche Zeitung; Frankfurter Allgemeine Zeitung

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