CDU to Push for Further Cuts in Solar Feed-in Tariffs?

Financial Times Deutschland (FTD) today reports that the Energy Policy Coordinator of the ruling CDU/CSU parliamentary group Thomas Bareiß (CDU) urged fellow party member and Environment Minister Norbert Röttgen (CDU) to open a new round of solar feed-in tariff cuts.  The unrestricted expansion of PV installations would be on the verge of getting out of control from a financial and technical point of view.

Mr Bareiß reportedly asked to limit the yearly expansion. To this end, he suggests to increase the next yearly degression scheduled for 1 January 2011, FTD says. The Federal Network Agency, the German grid regulator, had recently announced that a 13% reduction applied pursuant to the Renewable Energy Sources Act (EEG) due to the strong solar expansion. Depending on the expansion rate, Mr Bareiß is reported to favour an additional mid-2011 reduction. Alternatively a cap of 3,000 MW for solar expansion should be examined, FTD quotes Mr Bareiß.

Despite the two additional solar feed-in tariff cuts in July and October 2010, the boom in solar PV installations continues almost unabated, as the latest figures by the Federal Network Agency showed. While the political EEG target is in principle 3,500 MW for 2010 (additional reductions apply beyond that figure), transmission operators recently assumed a total of 19,399 MW to be installed by the end of 2010. After an installed capacity 9.899 MW in 2009, this would mean an additional capacity of 9,500 MW for 2010. A recent prognos/Roland Berger study commissioned by the trade association BSW Solar predicted a somewhat lower expansion of 8 GW for 2010.

As of January 2011, electricity consumers will have to pay a 72% higher EEG reallocation charge (EEG Umlage) of 3.53 Cent/kWh, the transmission system operators announced in October. The 72% increase from previously 2.047 Cent/kWh is mainly due to skyrocketing costs for additional solar capacities. With the so-called EEG reallocation charge, consumers have to bear the difference between market prices for renewable energy and the feed-in tariffs pursuant to the EEG. Whether the rise of the EEG reallocation charge has to be passed on in full to consumers is controversial. The president of the Federal Network Agency Matthias Kurth pointed out that prices for long-term contracts at the electricity exchange had fallen, and was critical of the announced increases in electricity prices. Still, a number of utilities have already announced to considerably raise prices due to the higher costs for renewables.

Apart from Mr Bareiß, there are other critics of the current solar funding system. Among them is Andreas Mundt, president of the German Cartel Office, who repetedly called for changing the financial support system for renewable energy. According to information by the energy information service energate published by the utility Stadtwerke Bochum, even the Energy Spokesperson of the opposition Social Democrats (SPD), Rolf Hempelmann, recently warned that in view of the current expansion rate of renewable energy sources, the EEG will soon reach its limits. In addition, Stephan Kohler, chief executive of the German Energy Agency (dena), told Berliner Zeitung that a skyrocketing PV capacity might cause the grids to collapse.

Source: Financial Times Deutschland, Welt Online

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