German parliament today approved an amended Renewable Energy Sources Act (EEG 2016), which replaces feed-in tariffs with competitive auctions and limits wind energy deployment to allow for the grid development to catch up.
The offshore cap, which will apply from 2021-2030, will vary from year to year to ensure that Germany reaches its 15GW wind energy target in the next 15 years. The annual auctions for onshore wind have been limited at 2.8GW and the limit is expected to increase after 2020 to 2.9GW a year. The annual caps also include repowering – the process of replacing old turbines with new, higher capacity models.
The new tendering procedure will allow for a bidder with the lowest offered price to be awarded the contract, much like the Dutch approach that recently resulted in DONG Energy winning the tender and building what is deemed the cheapest offshore wind farm worldwide.
Giles Dickson , Chief Executive Officer of WindEurope, said: “For onshore wind, the reforms set out clear volumes for wind energy deployment toward 2020 and beyond. This gives the industry a degree of certainty on investments and the opportunity to plan into the future.
“The same cannot be said for offshore where there is a lack of stability in the volumes. The buildout rate after 2020 will be uneven as the auctions vary in size from year to year. The volumes are also less ambitious than other Member States such as the UK, which has committed to 1GW a year to 2030 and the Netherlands, which will tender 1.4GW this year and then a further 700MW each year to 2020.
“The shift from feed-in tariffs to tenders is a trend we are seeing across Europe. Germany’s move was to be expected as Member States bring their support schemes into line with the European Commission’s state aid guidelines.”
Dickson added: “One of the biggest challenges facing Germany today is a lack of transmission infrastructure. Lawmakers must find a way to ensure that power generated in northern Germany from renewables such as onshore and offshore wind can be transferred to the power-hungry South.”
The reforms to the Renewable Energy Sources Act are expected to come into effect in January 2017.