Germany
As of 2009, the legal framework is the German Renewable Energy Sources Act (Erneuerbare-Energien-Gesetz – EEG). The feed in tariff, in force since 1 August 2004, was modified in 2008. In view of the unexpectedly high growth rates, the depreciation was accelerated and a new category (>1000kWp) was created with a lower tariff. The facade premium was abolished.
Feed-in Tariffs for 2009 installed panels (EUR/kWh)
| System size(kWp) | Groundmounted | On buildings andanti-noise walls |
|---|---|---|
| <30 | 0.3194 | 0.4301 |
| 30 to 100 | 0.3194 | 0.4091 |
| 100 to 1000 | 0.3194 | 0.3958 |
| >1000 | 0.3194 | 0.3300 |
Contract duration 20 years, constant remuneration. New contracts will be lower in value in future years (decreasing by 8-11% per year). Digression will be accelerated or slowed down by one percentage point if the market grows faster or slower than about 15% per year.
EEG
The Renewable Energy Sources Act (Erneuerbare-Energien-Gesetz, or EEG), enacted by the government of Germany, promotes the development of renewable energy sources with a feed-in tariff scheme. In conjunction with Germany’s climate preservation efforts, the ultimate objective of this legislation is to increase the amount of renewable energies in the German power supply to 12.5% by the year 2010. On the 1 January 2009 the latest version of the EEG came into force.
Overview
The fundamental idea of the EEG is that grid operators must pay a government-specified feed-in tariff to energy generators supplying energy to the grid from renewable sources. This feed-in tariff is intended to make energy from renewable sources cost-competitive with that from traditional sources, and it varies with the amount of energy generated by the producer and the type of renewable energy source. As an incentive to encourage technological advancements and cost decreases for parts and installation, the feed-in tariff drops yearly by a fixed percentage (degression rate).
The renewable energy sources supported by feed-in tariffs are as follows:
* Landfill gas, sewage treatment plant gas, and mine gas
* Biomass
* Geothermal
* Energy from solar radiation (eg, solar photovoltaic, solar thermal)
* Hydropower
* Wind power
Under the German electricity grid system, the grid operator is legally obliged to provide free access to the grid for all interested generators, and to pay the specified reimbursement for those suppliers qualifying under the terms of the EEG. No contract with the plant operator is necessary.
The Energy Feed-In Unit (Energieversorgungsunternehmen, or EVU) is responsible for calculating feed-in tariffs in an equitable way based upon current market prices of energy. Grid generators then pass the feed-in tariff costs down to end-consumers as an incorporated part of the final price seen on their energy bills.
History
Energy Feed-In Law [Stromeinspeisungsgesetz] (1991)
The precursor of the EEG, the Energy Feed-In Law was introduced on 7 December 1990. At the time of this legislation, grid operators were not yet obligated to provide free grid access to all electricity generators; as a result, the small-scale facilities responsible for most renewable energy generation found themselves either denied access to the grid, or otherwise strongly discouraged from accessing it.
Thus, this law represented a true milestone, by obligating all generators to be guaranteed access to the integrated electrical grid, and by ensuring the generators profitable compensation through the first generation of feed-in tariffs.
Renewable Energy Law [Erneuerbare-Energien-Gesetz] (2000)
On 1 April 2000, the Energy Feed-In Law was replaced by the Renewable Energy Law of 29 March 2000. This legislation largely maintained the statutes of its predecessor, but with a few changes – most notably, the introduction of compensation rates for energy produced from geothermal sources.
In conjunction with the phase-out of the popular 100,000-Roof Program (100,000-Daecher-Programme), an amendment to the EEG was made to adjust compensation rates for energy generated by solar photovoltaic sources. In addition, it clarified the legal relationship between regional grid operators and the facility operators generating electricity from renewable sources. This amendment was passed on 21 July 2004 and came into effect on 1 August 2004.
Renewable Energy Law [Erneuerbare-Energien-Gesetz] (2009)
The Renewable Energy Sources Act (EEG-09), entered into force on 1 January 2009, replacing the previous act of 2004. Highlights include:
* Higher price for energy: initial remuneration raised from 7.87 ct/kWh to 9.20 ct/kWh
* The EEG incorporates “degression” a reduction in tariff for new projects, intended to account for lower costs as production volumes increase and the technology moves down the learning curve. EEG 2009 lowers degression from 2% pa to 1% pa
* Bonus for enhanced power quality; the SDL-Bonus System Dienstleistungs Verordnung
* Increased remuneration for offshore wind: initial remuneration raised from 8.74 ct/kWh to 13 ct/kWh
* Electricity from onshore wind farms is to rise from currently 8.03 to 9.2 ct/kWh, degressed each year by 1%.
* Offshore wind farms will get 15 ct/kWh until 2011, after which it will be 13 ct/kWh for new projects, then cut every year by 5 %.
* New obligation on TSOs/DSOs to optimise and strengthen the grid or face financial penalties.
* There is also a repowering premium of 0.5 ct/kWh.
* PV solar falls to 33-43 c/kWh – degressed by 8-10% in 2010 and then 9% p.a after 2011.
Feed-in tariff rates
All specified feed-in tariffs and projected degression rates are as indicated by the EEG, and valid as of the 1 August 2004 version of the legislation.
Biogas
For electricity generated by power plants utilizing landfill gas, sewage treatment plant gas, and/or mine gas, the minimum baseline compensation is as follows:
* Capacity of 500 kW or below: 7.67 cents per kWh
* Capacity above 500 kW: 6.65 cents per kWh
Additional compensation may be available, depending on the nature of the electricity generation process, or if the gas has been processed to reach the quality of natural gas.
Beginning 1 January 2005, the compensation rates for newly-commissioned plants will be reduced by 1.5% annually of the relevant value for new plants commissioned in the previous year.
Biomass
For energy produced from facilities that exclusively use biomass as fuel and have capacity 20 MW or below, the minimum baseline compensation is as follows:
* Capacity of 150 kW or below: 11.5 cents per kWh
* Capacity 150 kW to 500 kW: 9.9 cents per kWh
* Capacity 500 kW to 5 MW: 8.9 cents per kWh
* Capacity above 5 MW: 8.4 cents per kWh
The feed-in tariff will only be 3.9 cents per kWh if the biomass facility utilizes waste wood of categories III-A and IV-A (as established in the Waste Wood Ordinance of 15 August 2002).
Additional compensation is available dependant on the origin of the biomass material used and the capacity of the biomass plant itself, as well as whether or not the plant utilizes combined heat and power generation.
Beginning 1 January 2005, the compensation rates for newly-commissioned plants will be reduced by 1.5% annually of the relevant value for new plants commissioned in the previous year.
Geothermal energy
For energy produced from geothermal power generation facilities installed before 1 January 2010, the minimum baseline compensation is as follows:
* Capacity of 5 MW or below: 15 cents per kWh supplied
* Capacity 5 MW to 10 MW: 14 cents per kWh
* Capacity 10 MW to 20 MW: 8.95 cents per kWh
* Capacity above 20 MW: 7.16 cents per kWh
For a newly-constructed geothermal installation, a uniform feed-in tariff is paid until the end of the twentieth year after the facility first opened (thus, an installation which opened during 2004 would receive payments until 31 December 2024.)
After 2009, the compensation rates for newly-commissioned plants will be reduced by 1% annually of the relevant value for new plants commissioned in the previous year.
Solar energy
For energy produced from power generation facilities utilizing solar radiation (ie, solar thermal or solar photovoltaic installations) that were commissioned prior to 2005, the feed-in tariff must amount to at least 45.7 cents per kWh. If the installation is attached to or integrated on top of a building or noise barrier, the compensation rates are as follows:
* Capacity of 30 kW or below: 57.4 cents per kWh
* Capacity 30 kW to 100 kW: 54.6 cents per kWh
* Capacity above 100 kW: 54.0 cents per kWh
Facade installations – that is, solar installations which are neither on a building’s roof nor are part of the roof, but which make up a substantial portion of the building – receive an additional 5 cents per kWh of electricity generated, as they have a lesser energy output than true roof installations, they help to increase visibility of PV and exploit more posibilities.
For a newly-constructed solar installation, a uniform feed-in tariff is paid until the end of the twentieth year after the facility first opened (thus, an installation which opened during 2004 would receive payments until 31 December 2024.)
Beginning 1 January 2005, the compensation rates for newly-commissioned solar installations will be reduced by 5% annually of the relevant value for new plants commissioned in the previous year. Beginning 1 January 2006, this rate is further decreased to 6.5% for those installations generating electricity from solar radiation but which are not attached to or integrated on top of a building or noise barrier.
Hydropower
For energy produced from hydroelectric power plants with capacity 5 MW or below which began operation before 1 January 2008, the minimum baseline compensation is as follows:
* Capacity of 500 kW and below: 9.67 cents per kWh (also applicable for hydroelectric plants built after 2007, but with some restrictions)
* Capacity 500 kW to 5 MW: 6.65 cents per kWh
For a newly-constructed hydropower installation, a uniform feed-in tariff is paid until the end of the thirtieth year after the facility first opened (thus, an installation which opened during 2004 would receive payments until 31 December 2034.) The tariff amount itself is dependant on the year in which the installation first opened, and decreases by 1% annually respective to the baseline 2004 year.
Hydroelectric power plants with capacity from 5 MW to 150 MW are also eligible to receive compensation for electricity generated if the plant was modernised between 1 August 2004 and 31 December 2012, on the dual conditions that 1) at least 15% more electrical energy was produced over previous levels, and 2) either good ecological status or “substantial improvement” over previous status resulted. The applicable tariff rates are only paid for the amount of additional electricity generated due to modernisation, and are subdivided as follows:
* For an increase in capacity of 500 kW and below: 7.67 cents per kWh
* For an increase in capacity 500 kW to 10 MW: 6.65 cents per kWh
* For an increase in capacity 10 MW to 20 MW: 6.10 cents per kWh
* For an increase in capacity 20 MW to 50 MW: 4.56 cents per kWh
* For an increase in capacity above 50 MW: 3.70 cents per kWh
For a newly-constructed hydroelectric installation, a uniform feed-in tariff is paid until the end of the fifteenth year after the facility first opened (thus, an installation which opened during 2005 would receive payments until 31 December 2020.)
Beginning 1 January 2005, the compensation rates for newly-commissioned plants will be reduced by 1% annually of the relevant value for new plants commissioned in the previous year.
Wind energy
For an onshore wind installation constructed prior to 1 January 2005, the feed-in tariff must amount to at least 5.5 cents per kWh. However, for a period of five years after commissioning, plants which generate 150% of the baseline yield within this time may receive an additional 3.2 cents per kWh of electricity generated. For any other plants, this five-year period may be extended by two months for each 0.75% they fall below the output goal of 150% of the baseline yield; however, once extended, the period may not exceed 20 years. For example, a wind installation which generated 120% of the baseline output would thus gain 5 years + (.30 / .0075) * 2 months = 11 years 8 months of increased compensation.
Of additional note is that, with the revision of the EEG on 21 July 2004, the grid operator is no longer required to reimburse energy from wind energy installations with output lower than 60% of the baseline output.
For an offshore wind installation at least three nautical miles from the shoreline and that was constructed prior to 1 January 2008, the feed-in tariff must amount to at least 6.19 cents per kWh. An additional 2.91 cents per kWh will be paid for twelve years after commissioning for plants which began operations on or before 31 December 2010, with extensions possible for plants located further than twelve nautical miles offshore or in water at least 20 meters in depth.
For onshore wind farms commissioned after 2004 and offshore wind farms commissioned after 2007, the compensation rates will be reduced by 1% annually of the relevant value for new plants commissioned in the previous year.