Renewables reform / Merkel: Energiewende must not destroy utilities

Federal government

Renewables law reform gets government approval

Angela Merkel’s cabinet has decided on the reform of the Renewable Energy Act (EEG) that is to take effect in 2017. The law proposal will next enter into the parliamentary process and is pending EU approval. The Energiewende was firmly established in Germany and could not be stopped anymore, Economy Minister Sigmar Gabriel said at a press conference.
The most important changes to the EEG include a shift from feed-in tariffs to an auction system to determine the payments to renewable power producers in all cases apart from small solar PV installations. The law reiterates the target of covering 40-45 percent of power consumption with renewables by 2025 and 55-60 percent by 2035. It also sets specific growth targets for each renewable technology. Onshore wind which, according to Gabriel, was currently “massively exceeding its targets”, will be expanded by 2,800 MW per year from 2017-2019 and 2,900 MW in the following years. The minister argued that the expansion of onshore wind had to be synchronised with a grid extension in the northern states. “Giving a priority to underground cables in this process will speed up the grid expansion, not slow it down,” Gabriel said.

Find a press release by the economy ministry here and the federal government’s bill in German here.

Read the CLEW factsheet EEG reform 2016 – switching to auctions for renewables.

Read the CLEW article Wind development has to wait for grid expansion about the reform proposal.

German Association of Energy and Water Industries (BDEW)

German utilities sceptical of Climate Action Plan 2050

The German government should not prescribe fixed paths to decarbonise the economy by 2050 in its upcoming Climate Action Plan, according to the German Association of Energy and Water Industries (BDEW). Instead, specific targets which could then be met by market forces more efficiently should be set, argued association head Stefan Kapferer at its annual congress. He also said he hoped the debate on a coal exit would not become part of next year’s general election campaign. “We need open talks to find the most efficient solution possible,” Kapferer said.

For background, read the CLEW factsheet Climate Action Plan 2050: Negotiating a path to decarbonisation

Federal government

Merkel – Energiewende must not destroy utilities

Utilities should brace themselves for further changes ahead, but the government must ensure Germany’s energy transition does not push energy suppliers over the brink, according to Chancellor Angela Merkel. “We expect further changes from you, there is no way around that,” Merkel told the audience at the annual congress of utility association BDEW. “But at the same time, we have to make sure the basic providers of energy do not collapse under the burdens caused by the Energiewende.”

Passauer Neue Presse

"German industry concerned about delay"

The German industry is concerned about the delay of the construction of important power lines and “foreseeable cost increases regarding the Energiewende”, reports Passauer Neue Presse. The cost resulting from missing power lines would further increase if grid expansion and renewables development continued to diverge, said Martin Wansleben, chief executive of the Association of German Chambers of Commerce and Industry (DIHK). This is “a major reason for low investments in many industry sectors”, said Wansleben.

Read the article in German here.

Deutschlandfunk

“Paradox grid policy”

The opposition by the population against the large power line projects was foreseeable, writes Theo Geers in an opinion piece for Deutschlandfunk. It is “paradox grid policy” that it is the government of Bavaria – the German state that most needs the direct current transmission lines from northern to southern Germany – that most obstructs the plans, says Geers. He adds that Germany has a structural problem with the planning and realisation of large construction projects.

Read the article in German here.

Heinrich-Böll-Stiftung

“Securing the means for renaturing and coping with long-term consequences”

Vattenfall, RWE and MIBRAG have not secured sufficient financial assets to cope with the clean-up costs regarding their lignite open-cast mining, according to a study by Green Budget Germany (FÖS) and the Institute for Advanced Sustainability Studies (IASS Potsdam). “The study verifies that the calculation of follow-up costs and the resulting financial reserves of the companies is opaque and not controlled by an independent entity,” writes Heinrich Böll Foundation in a press release. The study was commissioned by several associations, including Friends of the Earth Germany (BUND) and Heinrich Böll Foundation, who demand swift action by the federal government to avoid high costs for the taxpayers and the affected states.

Find the full study in German here.

Handelsblatt

“Countermotions? Negative.”

There is no visible resistance among E.ON shareholders before today’s vote on the split of the utility into two companies, writes Jürgen Flauger in Handelsblatt. Not one countermotion was brought forth in the run up to the annual shareholder meeting, confirmed a company spokesperson. Seventy-five percent of all shareholders must agree to the split.

Read the article in German here.

Read the factsheet E.ON shareholders to ratify energy giant's split.

Frankfurter Allgemeine Zeitung

“EU rebuffs suggestion for new exhaust fumes regulation”

Germany’s transport minister Alexander Dobrindt has suggested a new set of rules to make it more difficult for car manufacturers to circumvent exhaust fume reduction regulations, the Frankfurter Allgemeine Zeitung reports. But EU industry Commissioner Elzbieta Bienkowska considered the suggestion to be delay tactics, stressing that the member states should be working on implementing existing rules rather than delaying the process with new initiatives.

Frankfurter Allgemeine Zeitung

“No energy transition without an Energy Union”

The EU member states are pursuing the same overall targets such as a secure, inexpensive and environmentally friendly energy supply - but the reality is that every country is making its own policy regarding energy sources and setting power prices, writes Georg Zachmann, senior fellow at think tank Bruegel in a guest article for the Frankfurter Allgemeine Zeitung. Germany’s support for renewables is also lacking in cooperation with neighbouring countries. A solution could be an Energy Union as it is advocated by the EU. The union could find compromises between the member states to shape a system which is good for all countries, argues Zachmann.

Frankfurter Rundschau

“Re-adjusting the system”

Germany needs a re-adjustment of the whole system for electricity, oil and natural gas prices to cope with the cost of the transition to renewable energy, said Patrick Graichen, head of energy think-tank Agora Energiewende*, in an interview with Frankfurter Rundschau. “We could imagine raising the taxes on natural gas, petrol, diesel and heating oil to lower the charges for electricity,” said Graichen. Another possibility would be a fund filled with tax money among other things, to reduce the burden of the Renewable Energy Act (EEG)-surcharge.

Read the CLEW dossier Energiewende effects on power prices, costs and industry.

*Like the Clean Energy Wire, Agora Energiewende is a project funded by Stiftung Mercator and the European Climate Foundation.