BWE/VDMA: Wind Power Capacity Grows by 66% in First Half of 2014 – Just Before Entry into Force of EEG 2014 Revision

Due to uncertainty prior to the amendment of the Renewable Energy Sources Act (EEG 2014 or EEG 2.0) that will come into effect on 1 August 2014 and more land designated for onshore wind power use by the Länder (federal states), 1,723 MW of new capacity were installed in the first half of 2014, the German Wind Energy Association (BWE) and the German Engineering Federation (VDMA) informed. This constitutes an increase of 66% compared to the same period last year. Total wind power capacity at the end of June amounted to 35,389 MW. The associations expect onshore wind power to grow by 3,300 to 3,700 MW net until the end of the year. Thereafter growth will slow down, they say.

1) Reasons for Growth

Growth accelerated because of uncertainty prior to the adoption of the new EEG in view of the debates about rising electricity prices (and measures to cut down on them) as well as on new minimum distance regulations, BWE and VDMA pointed out.

As more space was made available for onshore wind use by the federal states, the wind power sector wanted to act before an opening clause was introduced in the Federal Building Code, which gives the Länder the right to determine minimum distances for wind power plants.

2) Repowering

Investment in more efficient turbines replacing older ones (so-called repowering) amounted to 267 MW by the middle of 2014 according to BWE/VDMA. At the same time some 64 MW were dismantled.

3) Outlook

The wind power sector expects new capacity in the range of 3,300 to 3,700 MW net to be installed by the end of 2014, leading to a total of almost 26,000 wind power plants with a capacity of at least 37,000 MW. For 2015 the sector is less optimistic, BWE/VDMA say.

At any rate the EEG 2.0 has introduced a growth corridor for onshore wind power. According to Section 3 no. 1 EEG 2014 onshore wind power shall grow by up to 2,500 MW annually. If the growth corridor of 2,400 to 2,600 MW per year laid down in Section 29 para. 1 EEG is exceeded, the regular degression for financial support pursuant to Section 29 para. 2 EEG will increase according to Section 29 para. 3 EEG, leading to lower support.

Under the new EEG 2014 regime, operators of new wind power plants will mostly have to sell the electricity generated themselves instead of being able to claim fixed feed-in tariffs as under the EEG 2012. However, in addition to the revenue obtained by the sale they can claim a market premium (cf. Section 19 para. 1 no. 1 in connection with Section 34 para. 1 EEG). .

VDMA/BWE announced to engage in the political process in order to ensure a predictable and stable growth path for onshore wind power. Two aspects the associations named in this respect are a new electricity market design (“Strommarktdesign”, to ensures in particular that enough non-volatile electricity is available) and work on the EEG 3.0 made necessary to lay down the rules for the auctioning process intended to start in 2017.

Source: BWE

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