Angela Merkel’s coalition amends renewables legislation

The amendments that modifies Germany’s 14-year-old Renewable Energy Act (REA) will apply from August 1 and give electricity-intensive firms time to apply for surcharge exemptions.

“We don’t want to increasingly burden energy-intensive industry in Germany, whereby consumer households would save 10, 20 or 30 euros per year [on their power bills] but put hundreds of thousands of jobs at risk,” says Sigmar Gabriel, Vice Chancellor and Energy Minister Sigmar Gabriel of the center-left Social Democrats.bundestag-plenarsaal-2

The central plank of the reform is the winding down of the feed-in-tariff, which will be phased out entirely by 2018 and replaced with a competitive-tendering, or bidding, system. In the name of cutting costs, the average incentive per kilowatt-hour will drop significantly for new installations built after 2014. Installations with more than 500 kW of capacity will not be eligible for any remuneration. This goes for projects larger than 250 kW in 2016 and then 100 kW in 2017.

Currently, one kilowatt-hour of such power draws a 17 euro cent subsidy. Next year, this will sink to 12 cents.

Left party spokeswoman Caren Lay said privileges for industry contained in the bill would also harm small cooperatives. The act failed to break the stranglehold of the big energy utilities, she said.

According to experts and advocacy groups, one of the reform’s losers will be small and medium-sized producers who will now have to compete with much larger producers. “The needs of the citizen-run enterprises aren’t reflected in this bill,” says Rene Mono of Bündnis BürgerEnergie, an umbrella group representing small-scale renewable energy producers. Currently, small-scale producers, including 900 energy cooperatives, account for well over half of Germany’s renewable power, a development that upended Germany’s energy sector making it one of the most decentralized and largely community-driven in the world.

Renewables generation differs greatly across Germany’s regional states. The small western coal-state of Saarland produces only 15 percent. Brandenburg, surrounding Berlin, generates an estimated 78 percent of its supply from wind, solar and biomass plants.

Some critics believe that households will foot the bill for 45 percent renewables in Germany by 2025.

The latest EEG amendment


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