More REFIT gymnastics

The European Court of Justice in Luxembourg is now scrutinising the German law which obliges utilities to buy electricity from renewable power plant at premium rates specified under the Renewable Energy Feed-In Tariff (REFIT). The case has been brought to Luxembourg by the Kiel District Court. It is faced with adjudicating on a case lodged by utility Preussenelektra against one of its satellite regional utilities, Schleswag, which buys large amounts of wind power.

Preussenelektra is demanding the reimbursement of DEM 500,000 which it has paid to Schleswag under the rules of the REFIT law to compensate its satellite for purchases of wind power. Schleswag is allowed to ask its parent company for financial help once its purchases of renewables represent more than 5% of its total sales. Schleswag's sales now consist of about 16% renewables.

Two-thirds of the cost of buying this power must be met by Preussenelektra under the REFIT law, a sum amounting to DEM 120 million for the current year. The decision to sue for just DEM 500,000 is apparently tactical. The utility is avoiding the risk of soaring legal costs.

The Kiel District Court is asking the European Court of Justice for clarification on whether the REFIT law represents a subsidy for renewables or not. If it does, the Kiel court suggests the law should have received EU Commission approval before an amended version became law in April. Lack of examination by the EC could mean that the law should be suspended by national courts.

Meantime, Schleswag is also embroiled in another legal wind wrangle. Six wind companies had taken the utility to court for refusing to hitch their new wind plant to its wires. Schleswag said the grid was full and it further claimed that the REFIT law does not conform with the German constitution.

The Itzehoe District Court disagreed. It ruled that Schleswag has to accept the wind power, but that to avoid critical overload, plant can be switched off on a "last turbine on, first off the grid" basis, if necessary. Schleswag has appealed.