BDEW: Revision of Renewables Law Not Enough – Specifies Further Action

The Federal Association of the Energy and Water Industry (BDEW) generally welcomed the plans for a reform of the Renewables Energy Sources Act (EEG) to be read in Parliament on Friday, but demanded further national and European action in the fields of conventional energy, heat, CO2 reductions by 2030, grid expansion and improved cooperation between the Federal government and the federal states (Länder). The statement was made prior to the start of a conference on “New Business Models for the Energy and Water Industry” organised by BDEW.

1. Conventional Power Market

With more and more green electricity being fed into the German grids that has priority under the EEG, the profitability of conventional power plants is suffering, though they are needed to balance supply and demand. Hence, a market-oriented solution for conventional power plants has top priority for BDEW. The association called on the government to create the legal framework for a decentalised capacity market (Leistungsmarkt) this year. “Within the next years we will be in the situation where we will need such a regulatory framework”, Hildegard Müller, head of BDEW said. She pointed out that BDEW presented a proposal for a market for secure capacity in the past.

BDEW called the situation for conventional power critical. Applications for decommissioning of 47 power plants had been submitted to the Federal Network Agency, BDEW said. Besides, electricity prices at the exchange had fallen by another 13% since last summer, and utilization of gas-fired power plants had fallen by almost a fifth within this period, BDEW claimed.

Mrs Müller criticised apparent attempts to extend the Ordinance to Regulate the Procedures for the Procurement of a Network Reserve as well as to Regulate the Handling of Planned Closures of Energy Generation Installations to Ensure the Security and Reliability of the Electricity Supply System (ResKV) beyond 2017, saying this was against government statements saying one wanted to solve the issue of a capacity market mechanism in a consistent way.

2. EEG Reform

On Friday, 27 June 2014, the second and third readings of the

  • bill amending the EEG and other energy-related laws;
  • the bill amending the special equalisation scheme for energy and trade intensive companies;
  • and the bill amending the Federal Building Code so as to give the federal states (Länder) the right to legislate on minimum distances for wind power plants.

shall take place in Parliament (cf. agenda of Parliament with links to bills). For more information on the EEG reform bill, please see here and here. For information on the special equalisation scheme, please click here. Information on the bill amending the Federal Building Code please see here.

BDEW welcomed the EEG reform in general. The new framework was a good basis to gradually introduce renewable energy sources to market conditions and have them contribute to system security, the association said. Besides, it was a step into the right direction to make new power plants that generate electricity consumed by the owner (so-called Eigenstromerzeugung) pay the renewables surcharge (EEG surcharge) in part.

Yet BDEW called for amendments of the EEG reform bill with regard to the following aspects:

  • comprehensive protection of legitimate expectations of investors;
  • improvements to enable expansion and modernisation of hydro power (Wasserkraftnutzung) in Germany;
  • the reduction of support for biomass.

3. CO2 Reduction

Not only with regard to the support for renewable energy sources, but also regarding the reduction of CO2 emissions, cost-efficiency had to become the main aim this year, BDEW demanded. “If we want to reduce CO2 emissions considerably, Berlin and Brussels have to focus on the heating and the transport sector. Germany should promote measures for energy-efficient renovations and energy-efficiency to a greater degree. The properties of natural gas and biogas in the heating, electricity and transport market should be tapped by the government. BDEW supports a new European CO2 reduction target of at least 40% by 2030”, Mrs Müller stated in view of the meeting of the European Council on 26/27 June 2014.

4. Grid Expansion and Cooperation Between Government and Federal States

BDEW also demanded that grid expansion was put on the agenda of the government in the second half of the year. As more than 90% of green electricity was fed into the distribution grids, they were of particular importance, BDEW said, pointing out that the Incentive Regulation Ordinance had to be amended so as to encourage more investment.

Besides, BDEW demanded to improve cooperation between the government and the federal states, citing new debates about the need of new transmission power lines despite the fact that the parties had agreed on a complex system to set up grid development plans.

Sources: BDEW

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