VDMA/BWE: 58% Onshore Wind Power Growth in 2014 – Net Growth of 4,386 MW Way Above EEG 2014 2,500 MW Target

In 2014 new onshore wind power turbines with a total capacity of 4,750 MW were installed, the German Engineering Federation (VDMA) and the German Wind Energy Association (BWE) informed. This exceeds the growth target of 2,500 MW net annually introduced with the amendment of the Renewable Energy Sources Act (EEG) that is effective since August 2014 (EEG 2014) by far. Even discounting a dismantling of some 364 MW net growth of about 4,386 MW remains 75% higher than planned.

1. Reasons for Growth

VDMA and BWE attribute the 58% growth (2013: 2,998 MW added) to three main factors

  • More space that was made available for wind power by the sixteen federal states;
  • Uncertainty prior to the amendment of the EEG 2014 (also called EEG 2.0) that lead to investments being moved forward;
  • Uncertainty prior to the introduction of an opening clause in the Federal Building Code, which gives the Länder the right to determine minimum distances for wind power plants that had the same effect as the concerns about the EEG 2014.

In July 2014, before the entry into force of the EEG 2014, VDMA and BWE estimated net onshore wind power growth to amount to 3,300 to 3,700 MW in 2014.

2. EEG 2014 Implications of Growth Exceeding Target

The EEG 2014 introduced a growth corridor for onshore wind power using the so-called “breathing cap” concept previously introduced for PV, with the aim of making additional wind capacity easier to plan and more predictable. As last year’s wind growth shows, this “breathing cap” is not really a cap, and with a deviation of 4,386 MW instead of 2,500 it breathes quite heavily.

According to Section 3 no. 1 EEG 2014 onshore wind power shall grow by up to 2,500 MW net 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 quarterly degression for financial support pursuant to Section 29 para. 2 EEG increases according to Section 29 para. 3 EEG, leading to lower support (regarding the relevant period for establishing the degression, please see Section 29 para. 6 EEG). However, this additional reduction or onshore wind support will for the first time apply as of 1 January 2016. This means that overshooting the the 2014 target by 75% in 2014 will not lead to “breathing related” support reductions in 2015.

Under the new EEG 2014 regime, operators of new wind power plants 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).

3. Repowering

Investment in more efficient turbines replacing older ones (so-called repowering) amounted to more than 1,000 MW in 2014 according to BWE/VDMA.

“Repowering has become a billion Euro market”, Lars Bondo Krogsgaard, Chairman of the steering committee for wind power at VDMA commented. Although new land would still be designated for wind power use, the focus was on repowering in the future, he added, pointing out that new turbines could provide system services improving system stability.

4. Outlook

For 2015 VDMA/BWE expect growth of 3,500 to 4,000 MW net. This would again exceed the EEG 2014 target by far, but from 2016 would lead to quarterly reductions of financial support pursuant to the EEG for new plants.

In 2016 the associations expect growth to slow down, albeit on a high level (no exact estimate is given).

Prospects for 2017 and beyond would depend on whether financial support would be auctioned and what the auctioning procedure will look like, the associations say. The EEG 2014 goes beyond the shift to mandatory direct marketing. It mandates that financial support for renewable energy sources and mine gas and its specific amount shall be determined through auctions by 2017 at the latest. Experience shall be gained by auctioning support for freestanding solar power plants (cf. 2 para. 5 EEG 2014). The German Cabinet has this week adopted a PV auctioning ordinance. The first auction is due to start on 15 April 2014.


Source: BWE

Related posts:

3 Responses to “VDMA/BWE: 58% Onshore Wind Power Growth in 2014 – Net Growth of 4,386 MW Way Above EEG 2014 2,500 MW Target”

Comments are currently closed.