Bundestag Adopts Renewable Energy Amendments, including 2011 Solar Feed-In Tariff Reduction

The German Bundestag (Parliament) yesterday adopted a revision of the German Renewable Energy Sources Act, including in particular the recently agreed changes for solar feed-in tariffs, for the green power privilege, and changes due to the transposition of Directive 2009/28/EC on the promotion of the use of energy from renewable sources.

The changes are contained in the European Law Alignment Act for Renewable Energies (Europarechtsanpassungsgesetz für Erneuerbare Energien – EAG EE).

The EAG EE will bring the following major changes:

1. Solar Feed-in Tariffs

Parliament approved the joint proposal for solar feed-in tariff changes in the Renewable Energy Sources Act (EEG) agreed in late January by the Federal Ministry for the Environment (BMU) and the solar industry association BSW Solar. Parts of the regular solar feed-in tariff cuts due at the beginning of 2012 are brought forward to 1 July, respectively 1 September 2011 for freestanding installations. The July/September reductions of up to 15% shall depend on PV capacity installed in March, April and May 2011.

2. Reduction of Green Power Privilege

Parliament also agreed on the proposed reduction of the green power privilege (Grünstromprivileg) for utilities.  Currently, utilities are fully exempt from the EEG reallocation charge (EEG-Umlage) if they supply electricity originating at least 50% from renewable energy sources.  The EEG reallocation charge exemption will now be capped at 2.0 Cent/kWh, and with therefore no longer cover the full EEG reallocation charge (presently 3.53 Cent/kWh). With the so-called EEG reallocation charge, consumers have to pay the difference between market prices for renewable energy and the feed-in tariffs pursuant to the EEG.

3. Further EEG Amendments

The EEG will also be amended in other areas:

  • An electronic register shall be created, allowing to issue and administer guarantees of origin for electricity from renewables sources. It shall be run by the Federal Environment Agency;
  • Network operators shall be obliged to submit a schedule for grid connection of renewable energy plants without undue delay, and shall also provide certain additional information for third parties seeking access to their network without undue delay, but at the latest within eight weeks;
  • The legal basis for the Ordinance on Sustainable Biomass shall be amended in order to incorporate social criteria for sustainability and aspects of legitimate protection of interests.

4. Amendment of  Renewable Energies in the Heat Sector Promotion Act

The Renewable Energies in the Heat Sector Promotion Act (EEWärmeG) will also be amended. The revised EEWärmeG will contain an obligation to use a certain share of renewable energy as of 2012 in existing public buildings that are subject to major renovations. Following the recommendation of the Environment Committee of the Bundestag, parliament agreed to amend the EAG EE draft, intending to simplify the use of bio gas in public buildings. A limitation in the original draft to use biogas in public buildings only in the case of an increased use of heat was removed. Conversely, the minimum share was raised from 15% to 25%. The use of district heating and remote cooling as well as combined heat and power and waste-based local heat was improved. The hardship clause for municipalities in financial difficulties to opt out was clarified.

5. Procedure and Further Steps

The parliamentary procedure for the above changes to the EEG is noteworthy.  Many important changes, including the solar feed-in tariff reduction, did not undergo the standard parliamentary process with three hearings for a draft bill.  Instead, several changes were added late in the parliamentary committee phase.  The changes were added to another bill dealing with renewable energy issues (the EAG EE bill) that was originally not intended to cover issues like the feed-in tariff reduction.  A draft including all amendments was not made public until shortly before yesterday’s decision.

The next regular plenary session of the Federal Council (Bundesrat) that could debate the EAG EE takes place on 18 March 2011.  The Bundesrat is the legislative body that represents the Länder (German states) on the federal level. The Federal Council does not need to consent, but could object to the amendment. In the case of so-called “objection laws” (Einspruchsgesetze), the Bundestag (Parliament) can ultimately override the Bundesrat’s objection.

The present amendment of the Renewable Energy Sources Act (EEG) is only a smaller amendment for the short term. The government is still planning a major revision of the EEG for 2012.

Source: Deutscher Bundestag

Related posts: