2016 Renewable Energy Act on the way - calls for tender due to be introduced in 2017
> June 2016
The Federal Ministry for Economic Affairs and Energy (BMWi) submitted its draft of the revisions to the 2014 Renewable Energy Act (EEG) on 14.4.2016. The Bundestag is expected to approve the bill quickly once the consultation process is over. Wind energy and photovoltaic tariffs are to be based on tender competitions from 2017 onwards.
The purpose of the legislation is to increase the proportion of renewable energy in the electricity mix from its current level of around 33% to 40-45% in 2025 and 55-60% in 2035. The amendment to the EEG will result in the adoption of a tender competition process. Operators will only be entitled to compensation if their facilities have successfully participated in a call for tenders. The Federal Network Agency (BNetzA) will be responsible for managing bidding rounds. Onshore and offshore wind facilities and photovoltaic facilities with an output of 1 MW or more are obliged to take part in the bidding process.
The pilot tendering process for open-air photovoltaic facilities in the 2014 EEG is to be improved and expanded to additional areas, e.g. landfill sites and extensive roof-mounted systems. The tender volume will be increased to 500 MW per year.
Onshore wind energy facilities with an output of 1 MW or more can take part in the bidding rounds if they have the relevant permit under the Federal Immissions Control Act (BImSchG). Besides wind energy facilities with an output of less than 1 MW, prototypes are also exempted from the tender requirement. Bids in the bidding rounds are based on a compensation rate, which employs a single-stage reference yield model (reference value). The reference value then serves as the basis for calculating the market premium or grid infeed tariff. The reference value is then adjusted depending on the quality of the site in comparison with the reference yield model. The adjustment factor for a 100% site is 1.00, 1.29 for a 70% site, and 0.85 for a 130% site. This model is then used to adjust the reference value at the start of years 6, 11 and 16 after commissioning of the facility on the basis of the actual yields of the facility in the five previous years. The maximum tender volume should amount to 2,500 MW (net) per year. No minimum tender volume has been set. According to the bill, the maximum value for power from onshore wind facilities is 7.00 cents per kWh for a 100% site. The first bidding deadline is set for 1.5.2017. Two additional bidding deadlines will follow in 2017, with another four tender deadlines in 2018.
Tenders are also to be introduced for offshore wind facilities. Preliminary reviews of areas for future offshore wind farms will be performed by the state in the "central model" to ensure that there is adequate competition. Under the new legislation, site planning, land-use planning, facility permits, EEG subsidies and grid connections will be better integrated and more cost-efficient. This will involve combining the various pieces of legislation which currently exist to create a new "Offshore Wind Power Act".
Unfortunately, the transitional provision contained in the 2014 EEG is also to be tightened up. Under the new rules, facilities are not obliged to take part in the tendering process if they were approved before 1.1.2017, if the approval was registered before 1.2.2017 and if the holder of the permit did not waive its statutory right to payment from the Federal Network Agency before 1.3.2017.
Under current plans, the draft legislation will be approved by the German Bundestag on 8.7.2016.
