Germany's appeal for renewables investment falls / Industry fears reform of renewables act

EY

"Germany 5th in EY renewable investment attractiveness ranking"

Germany’s attractiveness as a location for renewable investments has declined, according to major business consultancy EY. Germany is ranked fifth, trailing the US, China, India, and Chile. EY said current proposals to reform the Renewable Energy Act (EEG) were hitting Germany’s attractiveness. “Proposals to limit renewables to 40 to 45 percent of the total generation mix (by 2025) have introduced significant uncertainty about long-term demand in Germany, particularly for onshore wind, which will be the balancing technology.” Due to methodological changes, the rankings are not comparable to previous edition, and EY only indicated Germany’s downward movement.

Find the EY ranking in English here.

Also read the CLEW Factsheet EEG reform 2016 – switching to auctions for renewables.

PV magazine

“Coalition seems to agree on EEG proposal”

Energy minister Sigmar Gabriel and Chancellor Angela Merkel have agreed to a compromise on the EEG reform, an insider told pv magazine. According to the report by Sandra Enkhardt, it looks likely that onshore wind might not be relegated to a balancing technology, but new additions will instead be strictly limited to 2.5 gigawatts per year. But the government seems to insist on limiting total renewable development to 40 to 45 percent by 2025. “Given a share of 33 percent last year, this would translate into a drastic deceleration in wind and photovoltaic additions in the coming years,” writes Enkhardt. State premiers will meet on Thursday evening to hammer out a compromise, and pave the way for the reforms.  

Read the report in German here.    

For background read the CLEW factsheet on the EEG reform plans.

Naturstrom, et al. 

Green energy providers see threat to Energiewende from EEG reform

Four of Germany’s most prominent suppliers of renewable energy have called on the premiers of the country’s federal states to push for changes to the planned reform of the Renewables Energy Act (EEG) at a meeting with the federal government on Thursday. Elektrizitätswerke Schönau (EWS), Greenpeace Energy, LichtBlick and Naturstrom AG warned in an open letter published on Wednesday that limits to on-shore wind could lead to economic problems. They also argue that the planned tenders for renewable energy threaten small players such as citizen’s cooperatives.

Find the press release on the Naturmstrom website in German here.

Read initial reactions to the government’s EEG reform proposal here.

Frankfurter Allgemeine Zeitung

“Headwinds for reform of the Renewable Energy Act”

The wind industry, environmental activists, municipalities and regional governments believe the Energiewende is under threat due to the proposed reforms of the Renewable Energy Act (EEG), reports Ralf Euler in Frankfurter Allgemeine Zeitung. The changes proposed by energy minister Sigmar Gabriel put large companies at an unfair advantage, argue the opponents.

Read the article in German here.   

Süddeutsche Zeitung / Various business associations

“Energiewende Veto”

Yesterday’s ruling by an EU court that Germany’s system of financing renewable development constituted state aid is a setback for the government’s autonomy, writes Michael Bauchmüller in Süddeutsche Zeitung. The judges strengthen the EU’s role in the German Energiewende because the Commission could veto the mechanism, according to Bauchmüller. If the judgement remains in place, the EU could demand changes every time Germany reforms the system for renewable support. 
The German Chemicals Association (VCI) said the judgement underlined the need for a fundamental reform of renewable energy support in Germany, because costs were far too high. “Politicians should think about a new system for funding the energy transition – or Energiewende,” said VCI director-general Utz Tillmann in a statement.  The German Renewable Energy Federation (BEE) said it disagreed with the ruling because a majority of citizens favoured the system. Both associations said the government should try to fight the Court’s decision to receive final clarification.

Read the article in German here.

Find the ruling in Tuesday’s News Digest.

Find the VCI press release in English here.

Read the BEE press release in German here.

Reuters

“E.ON posts higher first quarter profit after Gazprom deal”

Germany’s biggest utility, E.ON, reported an eight percent rise in first-quarter core earnings, citing a deal with Gazprom over gas purchases. Without the deal, the company said its “first quarter result would have been slightly below that of the same period last year”, Reuters reports. E.ON blamed continued pressure on its conventional power plant business, which saw the company post a record loss of 7 billion euros last year. The company plans to spin off its conventional power generating capacity in a separate company, called Uniper.

See the article in English here.

See a press release from E.ON here.

See CLEW’s dossier on how the utilities have been impacted by the Energiewende here.

WirtschaftsWoche

"Nuclear phase-out costs: E.ON ready to pay"

Business magazine WirtschaftsWoche reports that E.ON is prepared to pay billions of euros more for the storage costs of radioactive waste as proposed by a government commission. Two weeks ago, the utilities had rejected a proposal from a government commission on the financing of the nuclear phase-out that would see utilities buy their way out of future responsibility for nuclear waste storage with a one-off payment of 23 billion euros, Angela Hennersdorf reports in WiftschaftsWoche. E.ON has now welcomed a potentially speedy resolution of the issue, and clear division of responsibility for nuclear decommissioning (which remains with the utilities) and waste disposal. CEO Johannes Teyssen has apparently come to see that it will be impossible to fight off the proposal, which was unanimously agreed by the commission, the article says.

See the article in German here.

See CLEW’s dossier on the challenges of the nuclear phase-out here.

Reuters

“E.ON would pay roughly 10 billion euros under nuclear exit plans - CFO”

E.ON chief financial officer Michael Sen told journalists that under the current nuclear decommissioning proposal, the company would be looking at paying around 10 billion euros in decommissioning and waste storage costs, Reuters reports. E.ON has stressed satisfaction with the split between responsibility for dismantling and final waste, “but it has misgivings about a cross-the-board risk premium for unforeseen futures costs”, Reuters says.

In a separate Article, Reuters reports that E.ON CEO Teyssen has said the company may have to delay investment and cut cost more than planned if the proposals remained unchanged.

See the article in English here and here.

Rhineland-Westphalia Institute for Economic Research (RWI)

“EEG surcharge rises, willingness to pay falls”

More and more Germans may be supporting the shift to renewables but their willingness to pay more for the transition is falling, according to a new government-funded study by the RWI. Some 88 percent of the public support the basic aim of promoting renewables, up from 84.4 percent last year, RWI said in a press release. But only 50.8 percent said they were willing to pay 1 cent/kilowatt-hour more in EEG surcharge, falling to 42.5 percent for a 2-cent rise, and 31.3 percent for a 4-cent rise. Between 2009 and 2015, the surcharge rose from 1.3 cents to 6.35 cents.

See the press release in German here.