Auction Design: BMWi Launches Public Consultation on Market Analyses for Different Renewables

Te Federal Ministry for Economic Affairs and Energy (BMWi) has presented different market analyses for the other renewable energy sources, launching a public consultation on them. This is to prepare auctioning of financial support for all renewable energy sources by 2017 at the latest. It follows the recent announcement of the first tender for financial support under the Renewable Energy Sources Act (EEG) for freestanding PV power plants.

1. Background Information

The EEG 2014 that came into force in August last year not only changed financial support from fixed feed-in tariffs to mandatory direct marketing that can be topped up with market premiums for most new plants, but also mandates that financial support for renewable energy sources and mine gas and its specific amount shall be determined through auctions by 2017 at the latest (for more information on all the changes, please see here). This is to make financial support even more market-oriented and to meet the requirements of the EU Guidelines on State aid for environmental protection and energy 2014-2020 (EEAG), which shall ensure that meeting the Union’s ambitious climate change and energy sustainability targets for 2020 and beyond will happen in a cost-effective way through market-based instruments.

To gain experience with auctioning financial support, tenders establishing support for freestanding PV installations are carried out as of 2015. The deadline for the first tender is 15 April 2015.

2. Market Analyses and Consultation

BMWi has presented detailed market analyses for

  • Onshore wind power
  • Offshore wind power
  • Roof-mounted PV installations
  • Biomass
  • Hydro power
  • Geothermal power

The analyses inform about

  • The state of play in the respective sector, e.g. number of plants, capacity, regional deployment, production costs
  • Remuneration under the EEG 2014
  • Potential for growth and cost degression
  • Planning and permitting procedures
  • Market players and competitive situation
  • Suppliers
  • Individual aspects of certain sources like power generated in PV installations consumed by the operator himself (so-called self-consumption or auto-generation).

BMWi has asked stakeholders to comment by e-mail to ausschreibung-eeg@bmwi.bund.de by 15 March 2015.

3. Next Steps

BMWi announced to develop key points for the auctions based on the market analyses and interaction with the stakeholders (e.g. workshops) and present them by this summer. Another consultation shall follow in July and August 2015, based on which BMWi will draft a bill that will also take into account the experiences gained with auctioning solar support. At the beginning of 2016 the bill shall be sent out to the federal states (Länder) and trade sector associations for review (so-called Länder- und Verbändeanhörung). The legislative procedure shall be completed by autumn 2016 (including approval by the EU Commission) so that the first auctions can take place by the end of 2016.

Source: Federal Ministry for Economic Affairs and Energy

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