First mandatory resident participation option for German wind farm as auction problems continue

The first mandatory share offers in a new wind power farm for neighbouring residents have been introduced in Germany, news website Der Spiegel reports. The operator company of the wind farm in northern state Mecklenburg-Western Pomerania offered 500-euro stakes in the project to people and municipalities within a radius of five kilometres from the turbines. All in all, 20 percent of all investment options need to be made available for the wind farm neighbours. The share offer in the joint stock company has been made mandatory to increase acceptance of wind power among local residents, as resistance by local protest groups greatly contributed to the stalled expansion of onshore wind power in the country in recent years. A similar rule had previously been introduced in Denmark. The state's energy minister, Christian Pegel of the Social Democrats (SPD), welcomed the first mandatory share offer. While some companies had already offered similar participation models on a voluntary basis before, "I'm convinced that volunteering alone won't be enough”, Pegel argued. Mecklenburg-Western Pomerania is the first state to apply the rule, but Pegel said he was not sure whether the latest reform of the Renewable Energy Act (EEG), which makes participation of local residents optional, would help establish the model in other states.

Despite a slight recovery after the lowest expansion in 20 years in 2019, Germany's onshore wind power sector continues to struggle with construction challenges. The volume of the next support auction on 1 February therefore would have to be halved from 1,500 to 750 megawatts, as it would have otherwise been undersubscribed due to lacking permits, Steven Hanke writes for energy policy newsletter Tagesspiegel Background. Thorsten Müller of the Foundation for Environmental Energy Law told Tagesspiegel Background the reduced volume is indirectly prescribed by EU state aid law, which mandates that auctions be economically viable. According to Müller, national lawmakers therefore could no longer determine expansion paths themselves, meaning that announcing them would become "mere symbolism”.