Renewable energy in Germany is promoted through feed-in tariffs, regulated under the Renewable Energies Act. Depending on the energy source, producers of renewable energy are granted a fixed tariff for each kilowatt hour of electricity generated over a period of 20 years. Electricity consumers pay for the tariffs.
In 2012, measures were introduced to promote demand-oriented production of renewable energy. Nevertheless, calls for a revision of the feed-in tariff system are growing ever louder. On 14 February the German environment and economic affairs ministers presented a joint proposal for cost containment. This envisages a cap on the costs consumers have to bear in relation to the Renewable Energies Act.
The proposal provides for a reduction of feed-in tariffs for new and, to a lesser extent, existing renewable-energy plants. Also, operators of new plants will have to directly market the electricity they generate (see page 5).
The measures should come into force on 1 August, just weeks before parliamentary elections on 22 September. The federal government and the German states (Länder) are currently negotiating a compromise on the proposal, which should be finalised by 21 March.
In the long term, the German feed-in tariff system is certain to be fundamentally revised, as a large number of political and economic stakeholders agree that this needs to happen.
One of the suggestions is to move towards a quota system based on green certificates trading, along the lines of the system already operating in Sweden and Norway.