Split utility response to new feed-in law

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The draft of Germany's new renewables feed-in law has been slammed by the country's major utilities association, Vereinigung Deutscher Elektrizitætswerke (VDEW), although at least one of its members, utility Schleswag, has some positive words for the proposal.

If the law is passed, electricity suppliers and their customers will have to shoulder a greater share of the costs for renewable energy, yet there is no incentive to stimulate more productivity from the wind plant operators, complains VDEW's Eberhard Meller. The draft does not serve to provide the necessary and sensible support needed by renewable energies, he says.

VDEW predicts that the cost to the power customer arising from the premium prices payable for renewables generated power will double to about DEM 3 billion in 2002, compared with the DEM 1.4 billion that the organisation says was paid in 1999. Since April 1999, private power customers have had to pay an electricity tax which will rise to DEM 0.04/kWh by 2003. "The draft law will plunder their pockets yet again. Consumers are being cheated of the fruits of liberalisation in the power sector," Meller says.

The VDEW's response to the proposed law has prompted Hermann Scheer, president of solar organisation Eurosolar, to warn the renewables lobby to prepare for further battles with the utilities over its introduction, Conflicts over the existing law became sharper the more successful the law turned out to be.

Schleswag half happy

In contrast to Meller's view, the draft for a new renewable energy feed in law, which received a first reading on December 16, has been welcomed by utility Schleswag. Situated in Germany's windy north, it has had to take large amounts of wind power onto its grid - and pay for the power - while other utilities have escaped entirely from contributing to clean power production.

Assuming the law takes effect, the limit to the amount of renewable power that a utility must take will be reduced from 5% to 1% of its total power sales, explains Arndt Hellmann of the company. This will reduce the costs of wind power at Schleswag from DEM 50 million in 1999 to DEM 10-15 million. It is a step towards more just financing of renewable energies in Germany, the company states. Hellmann points out, though, that what he terms the "burden" of renewable energy premiums will still grow because the price of power from conventional sources is sinking, increasing the difference between dirty and clean energies. In addition, overall sales are increasing.

The utility won, on balance, contracts for additional potential sales totalling about 200 million kWh in 1999. Since its overall supply base will thus be larger, it raises the 1% renewables ceiling. Sales in 1998 reached 9.2 billion kWh.

Schleswag is unhappy about being required under the draft law to pay 50% of the costs of any grid expansion needed in order to connect new renewables stations. The proposed legislation does not clearly define the difference between grid expansion and grid connection costs, the company says. A law worth its salt must avoid being open to various interpretations, Hellmann stresses.

Not interested

Schleswag will not take advantage of its new eligibility for premium payment for renewables power (Windpower Monthly, January 2000) to build renewable power stations on its own account, says Hellmann. The utility is bound into contracts with its parent company, Hanover-based PreussenElektra, which oblige it to cover its power needs from the cheapest possible sources, Hellmann explains.

The utility, based in Rendsburg, says that it now has 893 MW of wind power feeding into its grid, with 170 MW of new turbines connected in 1999 alone. Another 1400 MW of wind stations and single turbines are being planned within its supply area. About 20% of the electricity sold by Schleswag is generated by independently operated wind plant feeding into the utility's grid.

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