German parliament rubberstamps offshore liability law

Consumers will shoulder liability costs through new electricity levy

Legislation introducing new liability arrangements in connection with delayed marine transmission cables connecting offshore wind stations to the onshore grid was rubberstamped by Germany's upper house of parliament on Friday.

The law, which also deals with operational interruptions due to faults on the lines, takes effect on 1 January 2013. It brings with it a new offshore risk levy payable by electricity consumers of up to €0.0025/kWh. This is meant to cover liability costs in the industry, currently amounting to about €1 billion.

Electricity suppliers are unhappy about provisions mandating them to give at least six weeks' warning before passing on such levies to consumers. Firms may have to shoulder the costs for the first four weeks themselves.

The new law also sets out new rules on construction and operation of the offshore transmission cables which in turn affect financing, noted offshore wind foundation Stiftung Offshore-Windenergie.

"With the new framework conditions, it is now necessary for works contracts to be signed as soon as possible for the network connections Dolwin3, BorWin3 and BorWin4, which have been in the tendering process since 2011," said Joerg Kuhbier, chairman of Stiftung Offshore-Windenergie.  "This is the only way to limit the threat of disruption to offshore wind development," he said.

Kuhbier warned that it remains unclear whether transmission system operator Tennet  can guarantee the financing of the upcoming network expansion measures. "Without a swift solution to the financing problem at Tennet, any legal arrangement will come to nothing," he warned.

He urged a temporary involvement of German development bank KfW in the next three or four offshore cable systems.

"What effect these new rules have will only become apparent when we see the decisions taken by investors," said Hildegard Mueller, head of the German energy and water federation Bundesverband der Energie- und Wasserwirtschaft.

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