German Govt to Expand Capacity in Solar & Wind Power Auctions

German Govt to Expand Capacity in Solar & Wind Power Auctions

The German government, led by Angela Merkel, has said that it will expand the energy capacity tendered in renewable power project auctions to help decarbonise electricity, and will relieve the burden on consumers by reducing a fee charged to support wind and solar operators. While renewable sources hold a 50% stake in the power mix at present, these measures are aimed at ensuring that this percentage rises to 65% by 2030.

In a press webcast, Economy Minister Peter Altmaier said, “I am very satisfied with the measures,” adding, “We have agreed a massive tender volume.” Both the Conservatives and the Social Democrats that make up the coalition government- the Christian Democratic Union and the Christian Social Union (CDU-CSU)- were in agreement on the matter. These measures come ahead of the upcoming general elections scheduled to take place in September, for which the debate on climate change is shaping up to be a significant factor. The Green Party, which has risen from obscurity to central focus in recent time, has been doing well in the polls due to its appeals to a liberal, middle-class and environmentally-conscious electorate.

As per the new agreement of the government, permitted new onshore wind power capacity will be raised to 4 GW from 2.9 GW in 2022 tenders, and solar capacity to 6 GW from 2 GW. Tender volumes that are fully utilised in 2021 and 2022 will be more quickly readvertised, becoming available in the respective following year rather than in the third year after the initial offering. The renewable power surcharge on consumers’ power bills will be cut to 5 cents per kilowatt hour (kWh) in both 2023 and 2024 from the 6.5 cents/kwh applying to 2021 and 6.0 cents to 2022 under the renewable energy law (EEG).

Altmaier reiterated his view that the EEG surcharge should be abolished altogether at some stage. The agreement also aims to ease taxation rules for solar rooftop installations and wallboxes for electric vehicle charging in private residences. Corporate tax revenues from wind power companies to municipalities will also be allocated, in hopes of making the public more amenable towards accepting the industry.

The announcement of the agreement follows the virtual conference earlier this month that launched the Export Finance for Future (E3F) coalition, a seven-member alliance of European countries, including Germany, aimed at ending public export guarantees for fossil fuel projects, as part of efforts to reduce carbon emissions and fight climate change. Additionally, a string of renewable energy projects have been announced in Germany in the last few months, including an order from German project developer Dirkshof for twenty N117/3600 turbines, with a capacity of 3.6 MW each, for the citizen wind farm ‘Reussenkoege’ to be developed by The Nordex Group. The government has also been amending it landmark Renewable Energy Act (EEG), aimed at making solar and wind power two of the most important electricity sources in the country.

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