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Germany

Germany

Wind passed over in support program

Wind energy is unlikely to benefit from a new DEM 180 million program to support renewables in 1999, approved by the German parliament in early May and to be financed by the economy ministry. The program has been merged into the ministry's existing DEM 20 million renewables program for 1999, which also makes no provision for wind.

The combined sum of DEM 200 million (EUR 102 million) is to be available by the end of this month. Details are awaited, but even offshore wind is not likely to be eligible for it. Despite a commonly held view that the new fund was being introduced to compensate renewables for having to pay a new eco-tax on electricity, this link is not made in the official budget description. The indication is that the budget will not necessarily keep pace with the tax.

On the positive side for wind, the new DEM 0.02/kWh tax on electricity is eventually expected to help buffer the cuts in electricity prices unleashed by competition in the power sector. Germany's renewable energy feed-in tariff (REFIT) is set at 90% of the average price of power to end consumers two years prior to the current year. Since this average price now includes the new electricity tax, the REFIT payments for wind power producers will increase. A steep fall in payments is expected, however, before the buffering effect of the REFIT increase comes into play in 2001.

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