The German Gesetz für den Vorrang Erneuerbarer Energien (short title Erneuerbare-Energien-Gesetz, EEG) regulates the preferential feed-in of electricity from renewable sources into the electricity grid and guarantees its producers fixed feed-in tariffs.
As of October 2013, there are various options for utilizing electricity from renewable sources. All parties had already announced changes to the EEG during the election campaign for the Bundestag elections. The proposals for reforming the EEG vary between refolution and gentle adjustment. In its issue of September 10, 2013, Handelsblatt provided an overview of the most important options:
QUOTE MODEL -Simple and functional
The quota model has one key strength: it is very simple and basically works like this: The state stipulates the amount of electricity that must be produced from renewable sources each year - with the proportion increasing from year to year. Alternatively, the state can also define a certain percentage of total electricity consumption instead of an absolute amount of electricity.
It is now up to the grid operator or electricity trader to meet this quota. To monitor compliance with the volume obligations, the electricity generated from renewable sources is certified. The players must use certificates to prove that they have complied with the respective obligations. Those who fail to meet their obligations are subject to sanctions. Various countries, such as Sweden, are already using this model.
The advantages of the quota model are obvious: those who are responsible for ensuring that the quota is met have a vested interest in selecting the cheapest type of generation. As things stand at present, this would be onshore wind power. Photovoltaics, offshore wind power and biogas plants, on the other hand, would hardly stand a chance.
But there are also disadvantages: The model would inevitably lead to regional concentration; northern Germany, with its windy locations, would become by far the most important green electricity region. In the south, on the other hand, expansion would come to a standstill. The already noticeable imbalance in electricity generation - production would move northwards - would increase. The consequences: Even more power lines would have to be built to ensure supply throughout Germany.
The quota model is being promoted by the Monopolies Commission, for example, which recommended it to politicians again just last week.
MARKET INTEGRATION MODEL - Incentive for marketing
The market integration model for renewable energies aims to bring green electricity closer to the market. Instead of obliging the electricity grid operator to purchase electricity from renewable sources and pay the plant operator the remuneration stipulated in the Renewable Energy Sources Act (EEG), plant operators must market the electricity themselves. In principle, the EEG already allows this today: Many wind farms already use the EEG's market premium model, which has allowed them to market the electricity themselves or have it marketed since 2012. However, the model is currently only an additional option: if a plant operator cannot tolerate the rough winds of the market, they can return to the fixed feed-in tariffs of the EEG at any time.
In order to make participation in the market worthwhile, operators receive a technology-specific premium per kilowatt hour of electricity marketed under the market integration model. The costs for this are passed on to all electricity consumers - as is the case with the previous EEG.
However, the fathers of the model are hoping for a positive effect that could help stabilize the overall system: Operators would finally have an incentive to align their electricity production more closely with the requirements of the market. Up to now, the motto of many operators has been: produce and forget. They may not care whether the electricity they produce is currently needed or whether it cannot be put to any useful use. In the future, however, plant operators would earn a lot of money if they managed production in such a way that the electricity flows at times of high demand and therefore high exchange prices. Operators would take advantage of the opportunities offered by the electricity markets, develop new sales concepts or invest in electricity storage systems themselves. str
EEG-REFORM - Just a little cosmetic
Parts of the renewable energy sector have become very accustomed to the comfortable world of fixed feed-in tariffs and feed-in priority for their energy. They therefore want to hold on to the privileges of the Renewable Energy Sources Act (EEG) and are advocating a small reform instead of a system change.
For example, it would be a good idea to reduce the feed-in tariffs. The offshore wind power industry, for example, has developed its own proposals for this. In a recently presented study, electricity generation on the high seas is said to have the potential to reduce costs by more than 30 percent over the next ten years. At the same time, however, the industry emphasizes that it needs "reliable framework conditions to achieve a significant market volume". In other words, the EEG feed-in tariffs may fall, but the main features of the EEG should remain as untouched as possible.
The friends of the current EEG are receiving support from the Greens: "We want to maintain investment security through feed-in and connection priority as well as the principle of feed-in tariffs," the party's election manifesto states. The Greens see a key to reducing costs in a significant reduction in EEG exemptions for industry. This could lead to "a fair distribution of the burden between all electricity consumers".
The "light" EEG reform marks one extreme in a debate that will shape the months following the federal elections. On the other side are demands from the FDP for an immediate moratorium on the promotion of renewables. It is not unlikely that at the end of a long discussion there will be a system change that moves in the direction of a quota or market integration model. However, it is possible that small tweaks to the EEG subsidy will be sufficient for the time being.
Sources :
Legislative text at JURIS http://www.gesetze-im-internet.de/eeg_2009/
Wikipedia http://de.wikipedia.org/wiki/Erneuerbare-Energien-Gesetz
Handelsblatt http://www.handelsblatt.com/