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Germany

Germany

The workings of the revision

Germany's fixed rate operates on a sliding scale to account for differing wind strengths. Under the existing law, all electricity from wind plant receives a top rate of pay for at least the first five years. After that, turbines that reach a predefined level of performance move to a lower rate. The fixed prices are applicable for 20 years in what is effectively a long term power purchase agreement.

Germany's fixed rate payment system operates on a sliding scale to account for differing wind strengths. Under the existing law, all electricity from wind plant receives a top rate of pay for at least the first five years. After that, turbines that reach a predefined level of performance move to a lower rate. The fixed prices are applicable for 20 years in what is effectively a long term power purchase agreement.

Under the existing law, machines on windy sites move to the lower rate immediately after the five years are up. Inland machines may never perform well enough to move off the top rate, which in theory they can receive for 20 years. Performance is measured against a series of reference wind turbines which set the standard for expected production by all Germany's turbines.

Under the proposed revision to the German wind law (main story), wind plant proposed for low wind sites must be able to achieve at least 65% of the standard if they are to qualify for EEG rates. Developers will be required to complete a standardised report and government experts will decide whether a project qualifies or not.

Details have yet to be settled, such as the margin of error acceptable (also by banks) on the 65% and whether it applies to each turbine in a wind station, or the station as a whole.

Meantime, the proposed revision of the EEG increases incentives for repowering of older projects. The period for which the top rate is applicable is to be extended beyond the first five year period by two months for every 0.6% that a turbine fails to achieve 150% of the standard production. Previously the percentage was 0.75%, reducing the time over which the top rate was payable.

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