Germany debates higher renewables targets

Germany's draft renewable energies law (EEG) ignores the strong growth in renewable power that Germany will need, experts warned at a committee hearing in the lower house of parliament (Bundestag) today.

The draft "EEG 2021" bill, to be passed on 1 January and now under parliamentary scrutiny, assumes that Germany's power demand will remain at the current 580TWh until 2030.

All experts questioned on this issue in the Bundestag agreed that the government's assumption is unrealistic. This will make it impossible for Germany to reach its mandated 65pc renewables share in its power demand in 2030, they said.

Energy think-tank Agora Energiewende managing director Patrick Graichen called for a strong hike in the draft bill's 2030 installation targets: for onshore wind to 80GW against 71GW and currently about 54GW; for photovoltaic (PV) to 150GW against 100GW and currently about 52GW; and for offshore wind to 25GW against 20GW and currently 7.75GW. Graichen stressed that these demands are "mainstream" among experts — "we are not talking about demands from environmental NGOs [non-governmental organisations]," he said.

Energy law expert Thorsten Mueller, of the University of Wurzburg-based environmental and energy law foundation Stiftung Umweltenergierecht (SUER), warned that the renewable targets now debated within the EU are "at a completely different level than what is still debated in Germany".

Experts made various suggestions to further boost renewables growth, such as facilitating the repowering of suitable wind sites falling out of the 20-year EEG subsidy scheme, or lowering tariffs and levies on self-consumed power to boost PV installations.

An official from the economy and energy ministry last week defended the 580TWh assumption, pointing to an expected rise in energy efficiency, and the falling share of coal-fired generation, with its high internal power need. And the bill provides for adjustments should the estimate prove wrong, the ministry official said.

Economy and energy minister Peter Altmaier has said the ministry is prepared to review its assumption once the European Commission sets clear targets as part of the Green Deal, expected next month.

Pushing PPAs

Questioned by the opposition pro-business FDP party on how to "push" the market for power purchase agreements (PPAs), energy exchange EEX managing director Peter Reitz suggested strengthening the market for guarantees of origin (GOOs).

To an extent, the EEG stands in the way of PPAs, Reitz said. This is because the green quality of renewable power — the "key element" for a PPA, according to Reitz — cannot be marketed if the power is generated under the EEG.

There is strong, and rising, industrial demand for "green power", Reitz said, and this demand will increase once the Green Deal is passed.

At the same time, the CO2 price will rise, making renewable power "much more competitive" than it is today, electricity market and renewables director at the association of German chambers of commerce and industry (DIHK), Sebastian Bolay, said.

Germany's PPA market will also enjoy a boost once large power consumers are guaranteed their power price compensation within a PPA context, Bolay said. The EU recently passed legislation guaranteeing the power market compensation — which compensates larges consumers for the electricity-related CO2 price — also in PPAs and similar contracts. Germany should implement this rule by the start of next year, Bolay said.

New one-hour rule

EEX's Reitz commended the draft bill's proposed reduction of the timespan from which subsidies are suspended, to one hour of negative wholesale power prices, from the existing "six-hour rule". This will encourage site operators to take system issues such as grid bottlenecks into account, Reitz said. The government proposal to tag on the "lost" payments to the end of the subsidy period is an "acceptable compromise", he added.

Electrolysis

Municipal utilities association VKU managing director Ingbert Liebing said hydrogen electrolysis should be exempt from the EEG levy, as mulled by the ministry. But Liebing said the exemption should be capped for a limited number of hours, to encourage the flexible use of the electrolysis.

By Chloe Jardine