Still No Agreement in Mediation Committee with Respect to Solar Feed-In Cuts, Energy-Efficient Renovation and CCS

No agreements were reached for the pending bills on solar feed-in tariff cuts, tax incentives for energy-efficient renovations and the CCS technology in yesterday’s meeting of the Mediation Committee of the Bundestag (Parliament) and the Bundesrat (Federal Council).

The next meeting of the committee will take place on 27 June 2012. Until then two working groups on solar feed-in tariff cuts and energy-efficient renovation shall negotiate the matters. There was no mention of a working group with regard to the pending highly controversial CCS bill in the media.

In May the Federal Councial, which represents the interests of the federal states, rejected the latest bill adopted by Parliament in late March amending the Renewable Energy Sources Act so as to cut solar feed-in tariffs by about 20% to over 30%, thus reigning in the impressive expansion of solar power plants in Germany that far exceeds the government’s target of 2,500 to 3,500 MW annually. For fear of job losses in the solar industry, opposition even came from states with governments ruled by parties that make up the conservative/liberal coalition government in Berlin.

Reuters quotes Environment Minister Peter Altmaier, a conservative, as saying he was optimistic that agreement could be reached before the summer break. This will probably mean that the bill will have to be watered down in some way or other, although liberal Economics Minister, Philipp Rösler, said in the run-up to the meeting that he saw little room for concessions with regard to the tariff cuts. As the Federal Council rejected the bill with a two thirds majority, the bill can only be passed if agreement in the Mediation Committee is reached. Theoretically, it is possible for Parliament to overrule the Federal Councial, since the bill is only a so-called “objection law” and not a “consent law”, which expressly requires consent by the Federal Council. However that would require a two thirds majority in Parliament, which the government does not have.

The Mediation Committee also did not find a compromise with regard to the Act on Fiscal Measures Promoting Energy-Efficient Renovations of Residential Buildings (Gesetz zur steuerlichen Förderung von energetischen Sanierungsmaßnahmen an Wohngebäuden). It was the only bill of the 2011 energy legislative package, which the Bundesrat did not approve of. It aims to promote the energy-efficient renovation of buildings older than 1995 by giving tax incentives. A majority of federal states represented in the Bundesrat opposed the bill for fear of tax losses, which they demanded to be compensated for by the Federation.

Before the meeting of the Mediation Committee there were reports of a compromise according to which the total volume of tax incentives would be lowered from EUR 1.5 billion to EUR 1 billion, with the German Federation bearing EUR 430 million of the tax losses so that only the remaining EUR 570 million would have to be borne by the federal states and municipalities. Reuters quotes coalition sources as saying a compromise had been reached, however, the opposition apparently did not want to stick to it in the Mediation Committee for strategic reasons.

The lack of a compromise on the controversial Act on the Demonstration and Implementation of Technologies for Carbon Capture, Transport and Permanent Storage of C02 (CCS Act) means that Germany will still not be able to transpose Directive 2009/31/EC on the geological storage of carbon dioxide into German law. Hence, the infringement proceedings for non-compliance, which the European Commission reportedly started after the lapsing of the deadline of 25 June 2011, will continue. Besides, Germany will not be able to benefit from new state aid rules, issued by the European Commission lately. Under the new rules, the construction of new highly efficient power plants which are CCS ready may receive support of up to 15% of the investment costs. Such support might help to incentivise new conventional power plants that can balance the growing amount of intermittent renewable energy in Germany.

The bill on energy-efficient renovations as well as the CCS bill are both consent laws that expressly require consent by the Federal Council.

Source: Reuters

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