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Germany

Germany

Bid to end German feed-in tariffs

GERMANY: A plot to persuade German wind and other renewables generators to leave the fixed-price feed-in tariff system and market their electricity directly to customers or on an energy exchange is back in play.

The idea had reached an advanced stage back in spring 2009, before national elections choked progress. Discussions were well under way over a bonus system to encourage renewables generators to exit the low-risk feed-in system and accept the vagaries of the market. But in the lead-up to the elections in September 2009, the momentum was lost. Remarks this summer by Rainer Bruderle, Germany's federal economy minister, indicate that that momentum is to be restored.

Bruderle said that, in the medium term, electricity from renewable energies must increasingly be fed into the system in accordance with market demand. This would break with the current must-run rule for renewables generation.

Renewable energies must be assimilated more closely with the market, he stressed, adding: "This sets the direction of travel for future arrangements in the Renewable Energy Act." A new, amended Renewable Energy Act is due to take effect in early 2012.

Bruderle's remarks were made on the strength of a report to explain the incidence of so-called negative pricing on occasions last year, when electricity demand was low and wind energy feed-in high. The oversupply in the market resulted in electricity prices turning negative.

Consumers actually received money if they could take up electricity, for instance, by temporarily stepping up industrial production or by pumping water to the upper reservoirs at pumped-storage hydropower plants.

Anticipating the future change of course, preparations are under way at Trianel, a firm that provides energy trading, power station construction and other services to a network of nearly 50 municipally owned energy utilities, to bring wind energy and other renewables-generated power directly to the market.

The aim is to see the current monopoly of Germany's four transmission system operators on handling renewables electricity dissolved so that a competition of ideas on how to market renewables electricity can begin, says Trianel spokesman Sven Becker.

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