Röttgen: Renewables Have Great Potential – Funding Needs Adaptation to Market Development

Federal Minister for the Environment Dr. Norbert Röttgen (Christian Democratic Union – CDU) emphasized the great potential of renewables. His statements came after the grid operators announced a sharp increase in the EEG reallocation on Friday. Mr Röttgen highlighted the 340,000 jobs created in the sector, the amount of greenhouse gas emissions avoided, and the relatively high amount of investments in renewables in 2009 which helped the sluggish economy.

The increase from previously 2.047 Cent/kwh to 3.5 Cent/kwh is in large part due to skyrocketing costs for additional solar capacities.

Support for renewables (pursuant to the Renewable Energy Sources Act – EEG – in the form of feed-in tariffs) is an investment in modern technologies with strategic importance for Germany’s economic development, Mr Röttgen said. The aim was to give start-up financing until products and services were ready for the market. While funding made sense for  economical, ecological and geopolitical reasons, it had to be adapted to market developments.

In light of recent additional solar capacity, feed-in tariffs would presumably fall by another 13% on 1 January 2011, Mr Röttgen stated. The additional solar feed-in tariff cuts on 1 July and 1 October 2010 had been justified, despite solar industry opposition. Besides, the government agreed in its recently presented Energy Concept to propose additional measures for increasing cost-effectiveness, e.g. to review the numerous bonuses in the EEG.

The Federal Ministry for the Environment, Nature Protection and Nuclear Safety (BMU) is currently in the process of compiling a comprehensive EEG field report, including the recent EEG cost developments, the BMU press release says. It shall lead to proposals for an EEG amendment, which the Energy Concept announced for 2012. Priority given to renewable energy given pursuant to the EEG, and EEG funding as such, shall be maintained, the press release also states.

The newspaper Rheinische Post quoted Marie-Louise Dött, parliamentary spokesperson for Environmental Affairs of the CDU as saying it would depend on the field report how the government would amend solar feed-in tariffs next year. “Then we will evaluate how renewables relate to each other, and how we can increase competition among them”, Mrs Dött told Rheinische Post.

Rheinische Post also quoted Claudia Kemfert of the Berlin-based research institute DIW as saying that political action will be required if a booming PV market leads to such a high price increase. Feed-in tariffs would have to be cut or capped.

Source: Federal Ministry of the Environment, Nature Protection and Nuclear Safety, Rheinische Post

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