Last Thursday, German Environmental Minister Altmaier and Industry Minister Rösler produced a position paper that brought German energy policy to a new low. The proposals made by the two ministers will mainly come at the expense of wind power, thereby destabilizing the main pillar of the energy transition.
“Altmaier and Rösler’s proposal is an embarrassment for the German government. It endangers the entire energy transition with arbitrary ideas not in line with the way the energy sector works,” criticizes Henning Dettmer, executive director of the German Wind Energy Association (BWE). The two ministers want to lower costs, but they are doing so partly by changing feed-in tariffs for renewable power and the structure of this compensation, and the cuts will not get them where they want to be.
The across-the-board reduction in feed-in tariffs for onshore wind power to eight cents per kilowatt-hour will only save 30 million euros, just 0.03 percent of the retail power rate. “Because all wind turbines are treated equally, the proposal would mainly bring installations in southern and central Germany to a halt in light of the different wind conditions across the country. The rescinding of bonuses will only make the situation worse. The southern German states of Bayern and Baden-Württemberg have just begun building wind farms, and now they will be hit hardest. The facts show that the German government is not mainly interested in making the EEG future-proof, but in appearing to do so,” Dettmer says.
The cost of electricity is also crucial for the German Wind Energy Association. But the complex cost structure of wind turbines needs to be analyzed if cost reduction potential is to be tapped. “We have therefore contracted a renowned research institute to conduct a study on the topic. We expect the first results to be produced this spring, and they can serve as the basis for an objective discussion of cost reduction potential,” Dettmer adds.
Other proposals – such as a ceiling on the renewable surcharge, a reduction in compensation for feed-in management, and retroactive changes to feed-in tariffs – make investments in wind power projects impossible to calculate for financing. Banks will not accept what the government is proposing. In particular, midsize project developers and community wind farms would not be able to finance their projects any longer. Projects already underway would immediately feel the effects of the drastic cuts. “Wind power projects have long planning and construction phases, so the new proposals that are to take effect on 1 August 2012 do not provide appropriate or even acceptable protection of investments already made. I expect the industry to challenge these proposals in court if they become law,” Dettmer says.
“And of course, the obligation of direct marketing for new turbines is nothing other than a complete reversal of the EEG before the parliamentarian elections in September. The Environmental Minister has thus completely reversed the position he stated only a few days prior. It all adds up to undermine confidence. It makes you wonder whether the German government is really serious in its commitment to the energy transition,” Dettmer concludes.
For more information on: BWE