The offshore wind tariff

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Regulations governing payment for wind power generated at offshore locations in German waters are almost identical to those for wind plant on land. Under the latest renewable energy law, the Erneuerbare Energien Gesetz (EEG), which came into force in April, transmission grid operators are obliged to buy all wind kilowatt hours at a fixed minimum price, but can spread the cost of their purchases equally across all consumers.

While onshore plant receive DEM 0.178/kWh (EUR 0.091/kWh) for the first five years of operation, offshore stations receive this rate for the first nine years, assuming they are commissioned no later than the end of December, 2006. Beyond that the rate drops to DEM 0.121/kWh (EUR 0.062/kWh) assuming the plant achieve 150% of the output of a reference offshore installation, the definition for which has yet to be created by a new economics ministry ordinance. For wind plant which do not perform as well as the theoretical reference plant, the period for the highest rate is prolonged by two months for every 0.75% that their yield is below 150% of the reference yield.

To take into account technological progress and the expected reduction of costs, the law says that payment rates for wind energy will be subject to nominal digressive annual reductions of 1.5 per cent from 2002 onwards.

Every other year, the environment ministry is also to review the EEG by January 1, making tariff adjustments as it deems necessary, "in keeping with technological progress and market developments with regard to new installations." The law says that the tariff is applicable for 20 years-the amortisation period "commonly used in the energy sector."

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