Visit windpowermonthlyevents.com for the latest on our upcoming conferences and webcasts

Germany

Germany

Fully awake to the market

The author writes that German wind turbine operators know the expansion of wind energy in recent years was only possible due to the REFIT law. In Denmark and Spain, the swift development of wind power was only possible with fixed feed-in tariffs. In contrast, the expansion in liberalised countries like Britain, Sweden and Norway is disappointing. There is no evidence to support the view, repeatedly propagated in Windpower Monthly, that replacing the REFIT law with another arrangement would ease the clinch on energy policy. The editor responds.

Your statement referring to the "German wind lobby's failure to prepare itself for the free market" (Leader, October) is not correct. One of the bodies involved in setting up Naturstrom AG, the first independent power supply company in Germany to trade exclusively with electricity from renewable sources, is Bundesverband Windenergie, the federal wind energy association.

Be that as it may, German wind turbine operators know that the expansion of wind energy in recent years was only possible due to the REFIT law. They are not likely to give this up because on paper other models may appear to be better. In Denmark and Spain, too, the swift development of wind power was only possible with fixed feed-in tariffs. In contrast, the expansion in liberalised countries like Britain, Sweden and Norway is disappointing. These are facts that are published in Windpower Monthly's Windicator every quarter.

If, in 1990, a quota model had been introduced in Germany instead of the REFIT law, then we certainly would not have had 3000 MW of wind by the end of this year. At that time, this amount would have been designated as an unrealistic aim.

In the discussion about "quotas, fixed prices and green electricity," the core of the argument is never tackled: the opposition of the electricity utilities to renewable energies. The reason is their over capacity in generating capacity. Every privately operated wind or hydro power station reduces the output required of their power stations. Therefore the established utilities will fight against every effective measure to promote renewables. They will take action against high quotas, tender targets or fair grid access for renewables in just the same way that they do now against the REFIT law.

There is no evidence to support the view, repeatedly propagated in Windpower Monthly, that replacing the REFIT law with another arrangement would ease the clinch on energy policy.

It is of vital importance that the evidently effective REFIT law in Germany continues in force until fair market chances exist for renewable energies. This means fair grid access and an appropriate energy tax. It will take a few years yet.

Until then, the "green pricing" market will be limited -- big enough for a few companies like Naturstrom, but too small to ensure the necessary expansion of renewables. The 800 MW to 900 MW of wind capacity installed in Germany in 1998 can supply 600,000 households with electricity. It is an illusion to think that that many green customers can be found in a year.

Windpower Monthly has never argued against fixed prices for wind power, only against the method of fixing them. A power purchase contract provides a wind plant operator with a fixed price for the plant's output, just as a REFIT payment does. The discussion is over whether it would not be better for society as a whole to let markets set prices, rather than relying on political whim and bureaucratic "second-guessing" of costs and likely demand -- and the inevitable economic distortions this creates. We believe that to make the most of the liberal markets of the future, wind needs to champion market compatible ways of achieving long term, fixed price contracts. Systems such as the REFIT must be retained during the transition. To hasten development of wind energy, the chosen market mechanism must make wind an attractive investment option for all market players, be they independents or utilities.-----Ed.

Have you registered with us yet?

Register now to enjoy more articles
and free email bulletins.

Sign up now
Already registered?
Sign in

Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus

Windpower Monthly Events

Latest Jobs