EEG 2014 Amendment: Railroad Operator Special Equalisation Scheme Revision and “Statutory Maintenance”

A ministerial draft amending the Renewable Energy Sources Act (EEG 2014) that entered into force on 1 August 2014 has been sent out to the federal states (Länder) and trade sector associations for review (so-called Länder- und Verbändeanhörung) by the Federal Ministry for Economic Affairs and Energy (BMWi). The amendment shall in particular ensure that new railroad operators can benefit from the so-called special equalisation scheme laid down in Section 65 EEG.

1. Revision of Special Equalisation Scheme for Railroad Operators

Pursuant to the special equalisation scheme laid down in Section 65 EEG, the EEG surcharge (currently 6.24 ct/kWh; 6.17 ct/kWh as of 2015) can be reduced to 20% upon application for railroad operator whose electricity consumption at a delivery point amounted to at least 2 GWh in the previous fiscal year.

On 23  July 2014 the European Commission approved the EEG 2014. This did, however, not apply to Section 65 EEG 2014, which had been notified separately as the Commission wanted to examine the effects of the provision on the transport sector in a separate procedure.

During the review procedure the Commission – aided by external input – voiced concern regarding compliance of Section 65 EEG 2014 with European Competition law, saying the provision could create a market barrier for new railroad operators wanting to participate in tenders concerning regional railroad passenger transport services or transport services in the railroad passenger transport over long distances or freight transport services.

The amendment of the EEG 2014 shall serve to overcome the Commission’s concerns by facilitating the market entry of new players in the railroad sector. A negative decision in the notification procedure would have meant that (all) railroad operators could not have benefitted from EEG surcharge reductions pursuant to Section 65 EEG as of 2015 with negative consequences for ticket fares and competition in the transport sector, BMWi pointed out.

Therefore the amendment provides for applications for EEG surcharge reductions not only if consumption in the previous calendar year exceeded 2 GWh, but also based on a forecast of consumption if market entrants were awarded contracts for regional passenger transport services or want to participate in a tender or else want to provide services in the railroad passenger transport over long distances or freight transport services for the first time. The EEG surcharge reduction is, however, only granted to railroad operators who are awarded contracts in a tender. If no invitation to tender was made, the EEG surcharge reduction is subject to reservation of revocation (Widerrufsvorbehalt).

2. “Statutory Maintenance” on the EEG 2014

The draft also contains some “statutory maintenance” updates of EEG 2014 provisions. These changes refer to Sections 25 para. 2 (reductions in cases of non-compliance) and 100 para. 1 (transitory provisions) EEG 2014. These provision did not sufficiently reflect the intention of Parliament, the draft says.

Those changes are actually the second round of “statutory maintenance”, as the EEG 2014 already underwent a maintenance revision even before it entered into force on 1 August 2014. They were done through an otherwise unrelated statute of 22 July 2014. It appears that even the German legislator may have been somewhat struggling with the complexities of the new EEG 2014 and the speed of change in this area of the law.

Source: Federal Ministry for Economic Affairs and Energy