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Germany

Germany

Government proposes cut in wind rates, another utility spanner in works

The German government is proposing to not only reduce the premium rates of pay for wind electricity but also to limit the number of years in which the wind tariff will be paid. In some cases this will be reduced to just eight years. "The government is poised to destroy the wind branch with its latest plan," warns Heinrich Bartelt of the Bundesverband Windenergie (BWE), the German wind energy association.

The model has been drafted by the federal economy and environment ministries. For wind turbines installed by the end of the year, the payment will be DEM 0.17/kWh for the first 25,000 full load hours per installed kW. But for those installed in 1998 and 1999 the rate will be applicable for just 22,500 full load hours. In practice this would mean payment of the premium rate for only eight years at coastal sites and 13 years at inland sites. For turbines coming on line in 2000 and 2001, only DEM 0.16/kWh would be paid for the first 20,000 full load hours. The payment for power from turbines going into operation from 2002 would be decided in 2000.

Once the hours at full load have run their course, it is not clear what the rate of pay would be. The ministries apparently assume it would be the lower rate paid by utilities to industrial generators for their surplus power. But even this is uncertain. The deal between utilities and industrial generators for purchase of surplus power will by that time have fallen at the gates of market liberalisation.

Bartelt comments that the uncertain climate for wind is not likely to encourage investment in it. "And the problem is that members of parliament (MPs) aren't clear about what's going on," he says. "Representatives from utility Preussenelektra have been visiting MPs putting about the myth that wind operators are earning hand over fist when the utility raised post-tax profits from DEM 1 billion in 1995 to DEM 1.8 billion in 1996."

The government also plans to encourage utilities to participate in a "voluntary commitment" in favour of renewable energies and combined heat and power. In this way it hopes to force the utilities to adopt reasonable C02 emission targets. Failing this, the government is considering enforcing a target for renewables, to be met within a certain time period.

Antagonistic

The talks between the ministries and the renewables lobby regarding amendments to the Electricity Feed Law are becoming ever more antagonistic. The economy ministry uses information on wind power costs which ignore reality, says the BWE. The worst unreality highlighted was the assumption that wind turbine manufacturers grant customers 20% rebates on list prices. This so enraged Enercon's Aloys Wobben that at a recent meeting he ripped up the document under the nose of the civil servants responsible for it and threatened legal proceedings against the head of energy, Martin Cronenberg. In the aftermath of these talks, held in late May, the BWE claims the economy ministry is merely representing the interests of Preussenelektra and the major utilities. In this supposition the BSE is backed by the Verband Deutscher Maschinen und Anlagenbau (VDMA), the powerful association of the German machinery industry. VDMA's managing director Georg Berntsen states: "I refuse to accept such tendentious and unqualified statements from ministry officials. Cronenberg has more than damaged his neutrality in his one-sided negotiating stance." Both the VDMA and the Bundesverband Erneuererbare Energien (BEE), the German renewable energy association, have since left the negotiating table.

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