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Germany

Germany

FIRING WITH BLANKS, UTILITIES AND THE EFL

The latest round of utility ammunition against Germany's Electricity Feed Law (EFL) failed to ignite on impact. On January 9, the federal constitutional court ruled that a request by the Karlsruhe Court to have the EFL ruled unconstitutional was inadmissible. For the time being the law, the mainstay of the renewables market in Germany over the past five years, remains unscathed.

This attack started with the refusal of a utility to pay the full rate for renewable electricity produced by a hydro plant. Like wind plant operators, the operator of the hydro plant is entitled to receive a premium price for its output under the EFL. The refusal of the regional utility to pay this price -- part of an ongoing protest against the EFL by Germany's utilities -- prompted the hydro operator to appeal to the Karlsruhe Superior Court last summer. The Karlsruhe court sidestepped the case by asking for a ruling on the legality of the EFL from the federal constitutional court. This request met with a brusque rebuttal last month.

The Karlsruhe Court had argued that the EFL pricing arrangements are a "special levy," which under German law can only be used in strictly defined circumstances. It went on to claim that use of a special levy within the framework of the EFL is unconstitutional. But the constitutional court was far from convinced. In particular, it pointed out that the Karlsruhe court did not argue its case in sufficient detail, failing to explain why the "special levy" rules should apply to the EFL.

The Karlsruhe Court is now deciding whether to re-present its case, or whether to make a decision on the original application filed by the hydro operator against its local utility.

Meanwhile, giant utility Preussenelektra is plying the European Commission for help, complaining that the Brussels' licence for the EFL, issued in 1990, was for just two years. As a result the EC has written to the German government demanding information on amendments to the EFL. The law was amended in July 1994 and more recently in October 1995 to allow for an indefinite extension. The EC has apparently never been officially notified of these changes. When the licence was granted it was on the supposition that the programme would cost DEM 50 million a year, but the success of wind energy is such that DEM 100 million of clean electricity is being bought in the country annually.

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