Chancellor Merkel Outlines Key Aspects of Reform of Renewable Energy Sources Act

In a speech given at this year’s annual meeting of the Federal Association of the Energy and Water Industry (BDEW), Chancellor Angela Merkel outlined key aspects of a reform of the Renewable Energy Sources Act (EEG) that she urgently wants to address after the Federal Election in September. She wanted to maintain feed-in priority into the grids for renewable energy pursuant to the EEG and did not want to alter feed-in tariffs for existing renewable power plants retroactively, Mrs Merkel said. However, renewable energy sources had to contribute more to the costs of the Energiewende, she pointed out.

In the future renewable power plant growth and the necessary grid expansion also had to be better coordinated, Mrs Merkel said, calling the “Federal Requirement Plan for Transmission Networks”, which was recently adopted by Parliament and the Federal Council, a first step in the right direction. Besides, she called on the sixteen German states (Länder) to better align their renewable growth targets (In September 2012 Environment Minister Altmaier had already demanded that the Länder cut back their wind power expansion). To contain costs, renewable power plants like wind power plants should be built were they are most efficient, i.e. in Northern Germany in case of wind power plants, she said. Efforts to reach agreement between the Conservative/Liberal government and the states on an EEG revision before the election recently failed (for more information please see here).

Mrs Merkel also addressed the issue of a “new market design” for conventional power, a topic discussed for some time. Since renewable energy has to be purchased and transmitted by the grid operators under the EEG, the growing amount of fluctuating renewable energy has rendered many conventional power plants economically unattractive, especially modern highly-efficient but relatively expensive gas fired power plants. At the same time conventional power plants are much needed to balance the grids. Mrs Merkel mentioned the Ordinance on Reserve Power Plants (Reservekraftwerksverordnung), which the government passed last week so as to ensure the security of supply. She knew BDEW was critical of the ordinance, she said, but it was a first step. Besides, the ordinance was limited in time to 2017.

She understood that the economic sector wanted to know the details of an EEG reform and had therefore opposed a reform of the European Emissions Trading System (EU ETS), on which agreement was not reached in the EU lately, Mrs Merkel said. Yet, the amount of CO2 emissions was too high, distorting costs in favour of the cheaper coal-fired power plants to the detriment of the modern gas-fired power plants. Amendments of the EU ETS therefore had to be discussed in connection with the EEG, which however had priority.

Source: BDEW

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