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Germany

Germany

Regulatory changes prompt installation rush -- Germany expects 2 GW this year

Germany has moved into a bonanza year for wind plant installations following a significant hike in the regulated purchase price for wind produced electricity from January 1. For the first time since 2002, German wind power capacity could increase by more than 2 GW in a single year, forecasts the country's wind energy association, Bundesverband Windenergie (BWE).

Last year capacity increased by 1665 MW, almost the same as in 2007, to take the national total to 23.9 GW. It could have been higher, however, if a number of wind project developers had not held off connecting their new plant to the grid until last month to take advantage of the higher price (Windpower Monthly, February 2009). From Plambeck Neue Energien, Rainer Heinsohn says the firm commissioned just 6 MW during the whole of last year, compared with 10 MW in January, with a further 110 MW to come online shortly.

Under Germany's long standing renewable energy law, all wind power is bought by electricity supply companies at a price fixed by government for a period of 20 years. To encourage efficiency, the price was reduced by 2% each year for new wind plant installed in that year. But with substantial increases in wind plant costs, brought on by higher raw material and transport costs as oil prices soared, the diminishing purchase price was pulling the rug from under the German wind market. In response, the government increased the base price for plant coming online this year to EUR 0.092/kWh, up from EUR 0.0803/kWh for new plant in 2008. In addition, a bonus of EUR 0.005/kWh is effective for wind plant equipped to provide grid support services. The same bonus applies to projects where new wind turbines are replacing outdated machines. The annual price reduction has also been scaled back to 1%, starting next year.

The effect of the regulatory changes has not only been a politically created early year rush in 2009, but also provided a strong incentive to get projects up this year, before the purchase price drops by 1% from 2010. BWE expects Germany's wind power total to hit around 26 GW by the end of 2009.

Of the turbines that went up last year, the 2 MW size class proved the most popular, with 65% of all those installed being 2 MW models. Between them, Germany's Enercon, a privately owned company, and Denmark's Vestas provided over 80% of the new capacity installed, according to the Deutsches Windenergie Institut (DEWI). Enercon had a 52% share of the market, while Vestas took 32%.

The most active of Germany's 16 federal states was Brandenburg, an inland state where 408 MW was installed, representing almost a quarter of the new capacity. Lower Saxony was close behind with 384 MW, while Saxony Anhalt followed with 227 MW. DEWI notes that the states of Saxony Anhalt, Mecklenburg-Vorpommern, Schleswig-Holstein and Brandenburg now have sufficient wind capacity to meet more than 30% of their net annual electricity needs.

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