Wind power auction prices amended/ Wind power companies under pressure
Federal Grid Agency
The maximum support rate for onshore wind power installations in Germany’s renewables auctions scheme has been raised to 6.3 cents per kilowatt hour to ensure competition among bidders and a continuous expansion of the energy source, the Federal Grid Agency (BNetzA) says in a press release. Without the raise, the maximum support rate would have had to be derived from the results of previous auctions. These were dominated by citizen energy projects with long implementation periods which based their bids on projected future input prices that do not necessarily reflect current cost levels, the BNetzA says. The support rate in this case would now stand at 5cts/kWh, less than the current energy generation costs for onshore wind power of 5.6cts/kWh, which might have led to a situation in which not enough bidders compete in the next auction to exhaust the entire tendered volume. “The increase of the maximum price allows for a healthy competition in 2018,” BNetzA head Jochen Homann said. “Bidders can submit price levels that enable them to operate the installations at a profit.”
Find the press release in German here.
See the CLEW factsheet High hopes and concerns over onshore wind power auctions and the CLEW article Booming German wind power sector fears 2019 cliff for background.
German Wind Energy Association / German Association of Energy and Water Industries
The decision by Germany’s Federal Grid Agency (BNetzA) to increase the maximum support rate for onshore wind power installations in renewables auctions to 6.3 cents per kilowatt hour was “a first step to correct undesired developments” in the tender system, Hermann Albers, head of the German Wind Energy Association (BWE), says. The move was necessary to avoid a “rupture” in expansion of the energy source as bidders could now be sure to operate their installations at a profit. This is because the original price that would have been derived from previous auction results is lower than current energy generation costs for onshore wind power, the BWE says. The reason for this is that citizen energy projects in the tenders are allowed to submit bids for projects that will only be implemented about four years later, which enables them to speculate on price drops in the future, the lobby group says.
The German Association of Energy and Water Industries (BDEW) says that the increase was “a necessary correction” to the current auction system. The special rules for citizen projects led to “market distortion”, which warranted an amendment in the Renewable Energy Act that obliges citizen projects to abide by the same licensing and implementation rules as their competitors, BDEW head Stefan Kapferer said.
Read the BDEW press release in German here.
See the CLEW factsheet High hopes and concerns over onshore wind power auctions and the CLEW article Booming German wind power sector fears 2019 cliff for background.
Dow Jones Newswires
More and more electricity around the world will be generated with wind power turbines but Germany’s large manufacturers continue to lay off workers at home and abroad, Dow Jones Newswires reports. Senvion, Nordex, Enercon, and Siemens-Gamesa are among the companies reducing staff, “also due to political requirements”, the article says. Labour union IG Metall Küste says up to 2,000 jobs have been lost in the industry in Germany in 2017. Demand for wind turbines is generally on the rise around the world but stock prices of the German companies have plummeted in recent months. Difficult market access in booming China, a more hostile business environment for renewables in the US, and the shift to auctions in Germany all contribute to the manufacturers’ malaise, Dow Jones Newswires says.
IG Metall Küste adds that the expansion caps for renewable energy in Germany had to be removed. Regional union head Meinhard Gelken said the “stop-and-go” in Germany’s Energiewende policy over the last years had to stop in order “not to risk the energy transition’s chances”.
Read the IG Metall Küste press release in German here.
Find background in the article Booming German wind power sector fears 2019 cliff, and the factsheet From survey to harvest: How to build a wind farm in Germany.
Handelsblatt Global
The spectacular price drop in Germany’s auctions for wind energy spells trouble for the industry, write John Blau and Franz Hubik for Handelsblatt Global. “We are going through turbulent times; there will be some upheavals in our industry,” Hans-Dieter Kettwig, chief executive of Enercon, told the authors. “The problem is that prices are falling so fast that technological progress can’t keep up,” explains Arash Roshan Zamir, an analyst with Warburg Research. According to Dirk Briese, head of consultancy wind:research, consolidation in the industry will intensify.
Last week, the price for onshore wind power fell a further ten percent in Germany’s third auction for the technology to an average of 3.8 cents per kilowatt-hour.
Read the article in English here.
Find plenty of background in the CLEW article Booming German wind power sector fears 2019 cliff and the dossier The Energiewende’s booming flagship braces for stormy times.
Reuters
Peugeot maker PSA Group, which paid General Motors 1.3 billion euros for German subsidiary Opel, now wants about half of the money back after discovering that Opel is set to miss EU CO2 emissions targets by a wide margin, sources told Reuters. The French carmaker intends to pursue a legal claim on the grounds that it was misled about Opel’s emissions strategy, two people familiar with the matter told Laurence Frost and Gilles Guillaume.
Read the article in English here.
Find background in the CLEW dossier The Energiewende and German carmakers.
German Renewable Energy Federation (BEE)
A German CO2 tax in combination with a European carbon floor price would be a very effective means to protect the climate, according to a study by consultancy Energy Brainpool commissioned by the German Renewable Energy Federation (BEE). This model would largely avoid both shifting emissions abroad and electricity imports to Germany, and would lower the renewable power surcharge paid for by consumers, according to a BEE press release.
Find the press release and the study in German here.
dpa
Germany’s mining labour union IG BCE has called on the parties of the so-called grand coalition to pursue a “reasonable” energy and climate policy, news agency dpa reports. IG BCE head Michael Vassiliadis said “more realism” and a “modernisation boost” were needed from Chancellor Angela Merkel’s conservative CDU/CSU alliance and the Social Democrats (SPD) if they are to continue their coalition in the next legislative period. Vassiliadis said it was “absurd” to believe that the grand coalition parties had to use compromises on climate and energy found in the failed exploratory talks over a so-called Jamaica coalition between the conservatives, the pro-business FDP, and the environmentalist Green Party - such as the phase-out options for coal-fired power plants. Vassiliadis called for a “reset” on coal policy instead of relying on “extreme demands” of “clientele parties”.
See CLEW’s Coalition Watch and the article Government gridlock – can Germany still act on climate? for more information.
