German ministers discuss wind law and REFIT future

The German economy ministry is silent about the future of the country's Electricity Feed Law and Renewable Feed-In Tariff (REFIT), which have come under attack from the European Commission. The environment ministry, however, is clear on its plans for where the REFIT is headed.

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The German government's lips remain sealed over the future of the country's much beleaguered Electricity Feed Law. Despite mounting pressure from the European Commission and Germany's neighbours, who are anxious to see an end to the law's distorting effects on the planned internal market for renewable energy, the economy ministry is refusing to reveal its hand until after an ongoing review of the law is complete. This will not be until the end of the year. The law obliges utilities to buy all independently produced green power at the premium rates specified under its Renewable Energy Feed in Tariff (REFIT).

"First we have to sound out members of parliament, start a dialogue with other ministries and pull in information from various sources," says a ministry spokesperson. These sources include utility Preussenelektra, which has yet to inform the government of when it believes the volume of power it buys from renewable energy plant will exceed 5% of the utility's sales, the spokesperson adds. Once that level is reached, the utility no longer has to pay premium payments for the power.

Meantime, the Green Party, a member of Germany's coalition government, is looking beyond the REFIT. Spokeswoman Gunda Röstel is advocating the rapid creation of a spot market for electricity. This would give green power traders the opportunity to buy electricity from renewables power and sell it on to cover peaks in demand, she says. A reduction of grid access levies for renewable power producers is also necessary, along with an exemption from the recently introduced DEM 0.02/kWh ecotax on electricity, adds Röstel.

Energy expert for the Green Party, Michaele Hustedt, believes the REFIT law will have to be amended before the end of the year. She proposes that both private and utility renewable plant operators be entitled to premium payments for their power. At present, only private operators qualify.

quota limit

Where economy minister Werner Müller is headed with the REFIT is unclear, but there are clues to his general direction. As part of the compromise deal between the government and utilities on the future of nuclear in Germany, Müller offered to limit any fixed quotas for particular forms of electricity, such as renewables. Such quotas are being advocated by the EC to speed up the use of renewable energy in Europe. In return for this ministerial pledge, the utilities must limit operation of nuclear plant to a suggested 35 years. The document sealing the deal states: "Should for any overriding reason, the compulsory feed-in (for example through quota arrangements) of special types of power generation have to be regulated through legislation (for example, to secure the purpose of the renewable energies feed-in law as a state responsibility), the sum of all quotas will be restricted to 10% of annual net power generation."

The Bundesverband Erneuerbare Energie (BEE), Germany's renewables association, adamantly opposes the 10% ceiling. BEE's Heinrich Bartelt rejects any link between renewables legislation and the phasing out of nuclear power. Ministry plans to replace the existing 5% ceiling in the REFIT law with a new barrier are also unacceptable, he adds.

Clear message

Although the economy ministry is cautious about revealing its views on where the REFIT is headed, there is little reservation at the federal environment ministry. The rate of pay for wind power should be re-oriented to reward development at inland sites, says environment minister Jürgen Trittin. Most of the good wind sites at coastal locations have now been developed and the pressure on the coast needs to be relieved, he says. Higher REFIT rates would make low wind sites economic to develop.

Trittin foresees a step by step approach to amending the law. First, the 5% ceiling should be abolished to ensure that the expansion of renewables is not blocked. Second, the cost of paying for wind power should no longer fall solely on those utilities in windy regions in the north, where most wind plant are sited, but be spread across the whole of Germany.

Trittin is also pressing for fixed minimum rates of pay so as to uncouple the REFIT rates from the falling power prices in Germany as a result of liberalisation. To meet the demands of the EU for a competitive element in all electricity pricing, Trittin recommends a cap on the volume of renewables eligible for premium payments. This would limit the overall cost to ratepayers and prevent windfall profits being scored at particularly windy sites. He also recommends that arguments over who should pay the costs of connecting wind turbines to the grid and over the costs of reinforcing the grid to allow for more wind plant should be settled by law.

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