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Germany

Germany

An urgent issue

Excessive charges and complex arrangements for accessing the electricity grid are making a mockery of Germany's supposedly liberalised energy market. The just-ousted government is much to blame for the debacle. Instead of drafting regulations allowing fair access for all, it nominated utilities and big industry to draw up the grid rules of the future. Smaller independent power generators chose this inopportune moment to doze off. By the time they woke up to what was going on, the dastardly deed had been done. Instead of being in a position to sell green electricity directly to millions of customers, who are free for the first time in decades to pick and choose their supplier, renewables have been left tapping forlornly on the windows of a new market place in which they are unwelcome, unwanted and for which they are unprepared.

Having missed the opportunity to help shape the grid rules, wind and the other independents are fighting a rearguard action to have them changed. As they stand, the rules take the form of a monopoly pact engineered by utilities and big industry to maintain the status quo of their market dominance. Distance-dependent charges for beyond 101 kilometres, high grid system charges, simultaneity factors and hidden reserve capacity charges are just a few of the utility safeguards that make grid charges in Germany soar above those in neighbouring Scandinavia. Nord Pool, the electricity exchange for Sweden, Norway, Finland, and shortly Denmark, makes sure grid operation -- with access charged at simple tariff rates -- is lean and mean. In Germany it is anything but. To complicate matters still further, the rules are not binding. Individual utilities can invent new arrangements when it suits them.

Environment organisations in Germany like Greenpeace and the Öko-Institut are trying to help renewables by fighting for simpler access and cheaper charges (pages 36-41). Their job may or may not be made easier depending on how fast the new Social Democrat led government emerges from the federal election on September 27 -- and how fast it gets to grips with energy issues. Having secured 41% of the German vote, the SPD is widely expected to form a coalition with the Green party and its 6.7%. If this happens the SPD is likely to introduce clear regulations with fixed and transparent costs for grid transmission. This time the wind lobby needs to make its voice well and truly heard.

So far the urgency of the issue of grid access for wind plant operators has failed to make itself felt. Safe within the sheltering arms of the Electricity Feed Law (EFL), which obliges utilities to buy all renewables power, wind turbine owners have apparently not noticed their market is undergoing radical change. From next year, when Europe's Internal Energy Market kicks into force, green electricity is set to become a much sought after product. Not only will it appeal to environmentally conscious citizens and businesses at home, but also to utilities in neighbouring countries obliged by their governments to include a fixed quota of electricity from renewables in their standard supply portfolios. If these utilities run short of their own supplies, German wind will look an attractive buy. What a shame that without fair and equitable grid access, wind plant operators will be unable to oblige. Locked into selling their power to utilities, they can only watch from bitter sidelines as their power is profitably traded on.

blueprint for change

At least one renewables grouping has already spotted which way the wind is blowing -- entirely in the direction of the utilities. Energy Foundation Schleswig-Holstein, an independent body in Kiel, is promoting an alternative market structure aimed at the free trade of green electricity in Germany and across international borders. In the European arena, the foundation's approach has a significant advantage to the Electricity Feed Law -- it can be integrated with the aims of the Internal Energy Market and will solve Germany's problem with the EC's competition Commissioner, Karel van Miert. He has officially objected to the current renewables support system (page 35). The Energy Foundation could be helped on the way by another development at regional level: the birth of an electricity bourse outside the remit of the federal liberalisation law.

From a bird's eye view, the German wind lobby's failure to prepare itself for the free market ahead is perplexing. So too is its apparent willingness to be sidetracked by utilities into court-room battles over the legality of the EFL and the Renewable Energy Feed-in Tariff, instead of putting all its lobbying force into gaining fair grid access. There can be no argument that the EFL needs to be retained for several years to come so that renewables are fully protected in their transition to competitive trading. And it is understandable that the relatively slow pace of German liberalisation has not provided the same stimulus for change in renewables legislation as in neighbouring countries. But to behave as if change is largely something to be fought against is folly indeed.

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