German Greens propose industry power tenders

Germany's opposition Green Party has suggested introducing tenders for green industrial power, within the framework of the country's renewable energies law (EEG).

Under the proposed tender regime for green industrial power, companies would tender the power volumes they need. The contracted volumes of green power, and the accompanying guarantees of origin (GOO), would be available exclusively to the contracting firm, over a period of 20 years. The firms would be able to market the power and the GOOs.

The proposals were put to the lower house of parliament, the Bundestag, on Thursday, but were rejected.

The Green Party is almost certain to form part of Germany's next government, following federal elections in September. The party has been consistently polling second since the start of the year, at times overtaking outgoing chancellor Angela Merkel's CDU/CSU group.

Green Party energy policy spokesperson Julia Verlinden at an online industry event this week said that the proposed tenders could be implemented "complementary" to power purchase agreements (PPA). The tenders would provide safety for investments in the case, for instance, that the off-taker is unable to pay, she said. In this case, the power volumes could fall back into the EEG system.

Verlinden warned that backing PPAs alone could slow down renewables growth in Germany, as PPAs insufficiently address the investment risks, or else come with excessively high prices given the risk premiums priced into PPAs by producers and by the banks financing the projects — these risk premiums do not apply under the EEG, Verlinden said.

The proposed tenders would also clear away a major obstacle to industrial green power procurement, Verlinden said — the fact that green power generated under the EEG does not qualify for GOOs.

The idea of coupling PPAs with state guarantees, mooted at the event, "would at any rate be exciting", deputy Timon Gremmels of the co-governing Social Democrat SPD said. Gremmels, who is a member of the parliamentary committee on economic affairs and energy, suggested that PPA project developers could be obliged to share a part of their proceeds to local citizens, paralleling the new EEG rules for onshore wind farms.

By Chloe Jardine