Vahrenholt: Risks for Future Acceptance of Renewable Energy

Germany must make sure that its renewable energy concept does not get too expensive. Otherwise, the acceptance of renewable energy production is likely to face serious challenges, said Prof. Dr. Fritz Vahrenholt at today’s 3rd Cleantech Conference in Munich.

Dr. Vahrenholt is the CEO of RWE Innogy, RWE’s renewable energy subsidiary.

He mentioned in particular long-term acceptability risks due to excessive solar energy support mechanisms. 2010 may see more than 5,000 MW of additional solar generation capacity.  Currently, the EEG renewable energy cost reallocation amounts to about 2 ct/kWh, with spot market prices for electricity being around 5 ct/kWh.

The EEG reallocation may soon increase to 3.5 ct/kWh or more, due to the current massive increase in solar generation. The increase may continue in the coming years, and may ultimately undermine acceptance of renewable energy generation.

Existing support for solar generation has already created 85 billion of additional costs. Continued excessive support in particular for solar generation in Germany may lead to a material backlash against  renewable energy generation. If pubic opinion turns against renewable energy, politicians may consider additional ways to reduce the attractiveness of renewable energy generation.  Even though a reduction of feed-in tariffs for existing plants would face legal opposition, there may other ways to burden solar energy generation, e.g. by introducing a special additional network fee for photovoltaic systems.

To balance the changing input from solar and wind power generation, an extension of the operating time of German nuclear power plants remains necessary. Technically, nuclear power plants can react quicker to changing needs than gas-fired plants.

Dr. Vahrenholdt also presented various elements of RWE Innogy’s venture capital investments. Out of the EUR 1.4 billion that RWE invests in renewable energy per yer, 5% go into venture capital investments. 70% are wind, 15% biomass and 10% hydro.

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