The role played by the individual German states in stimulating a market for wind energy is often forgotten. Yet the programmes of support run by the Länder are an integral component of the German success story. Now, however, the Länder with most wind turbines are axing their support in favour of competing renewable technologies. Others are continuing their local stimulation of wind, with ideas ranging from a surcharge on utilities to pay for a wind fund, to looking at the potential of sites along motorways and in docklands. How much support does German wind energy receive? This survey is a step-by-step account of the subsidies paid by the German Länder in addition to those under the federal programme of support and in addition to the premium payments for wind stipulated by the Electricity Feed Law.
No other country in the world can match the rate of growth of wind power capacity in Germany this decade. By the end of the year some 1600 MW of wind plant will be in operation, compared with less than 50 MW at the start of 1990. This remarkable achievement is a result of three separate policies: the federal 250 MW wind research and development programme; the premium rates of wind set by the Electricity Feed Law; and last but far from least, the combined efforts of the German states, or Länder, which have steadily provided financial incentives for local investment throughout this decade. Over the last six or seven years, the Länder have contributed some DEM 325 million towards kick-starting a whole new renewable energy sector.
The time has come, however, when Länder governments are beginning to feel they have done enough for wind. In many Länder the pendulum of wind support is swinging back to zero, or has already reached it. Aid is being withdrawn and allegiances are shifting to solar energy. In the most extreme case, Lower Saxony, with the second largest volume of wind capacity of all the Länder, has now definitively abandoned its financial allegiance to wind in favour of solar energy. Economy minister Peter Fischer has announced a "solar offensive" in which DEM 65 million in support will go to solar projects to the year 2000. Wind energy is to get nothing more.
Some Länder, such as Schleswig-Holstein and Hesse, are following in Lower Saxony's footsteps with an orderly and predictable year-by-year reduction in wind aid. Others, like Baden-Wuerttemberg are following a go-stop-go course. This jerky approach to support usually reflects a Länder that has run short of cash for wind while at the same time being overrun with applications for support. In contrast, the interior land of North Rhine Westfalia, more usually associated with coal mining, electricity generation on a massive scale and heavy industry, has recognised that these traditional activities will not provide its economic base forever. It has begun a high profile drive to expand the use of renewable energies with DEM 29.6 million available this year in aid and cheap loans.
ENOUGH IS ENOUGH
All but one of the German Länder -- Berlin -- have been running support programmes for renewable energies. Even the smallest city-states, Hamburg and Bremen, have been doing their bit. But the approach to providing support differs widely across Germany.
In the coastal north, just south of the Danish border, the two windiest states have now had enough. Lower Saxony closed its doors to new wind applications at the end of 1994 and since then has been clearing the backlog. The last year of support was 1995 when DEM 3.1 million was paid out. This year there is no cash. Schleswig-Holstein is steering the same course. Wind aid fell from DEM 3.8 million in 1995 to DEM 1.1 million in 1996 and will decline again in 1997 by anything up to a third of the 1996 figure. The sum surviving the budget cut will be sufficient for only a few projects. These will have to have a special feature to merit support, such as an unusual location or use of a new generation, probably megawatt-size machine. Broad wind support in Schleswig-Holstein has become a thing of the past. By 1998, wind funds may have dried up altogether as the transition to solar energy support begins. In 1997, the land will probably draw up new guidelines for a support programme for photovoltaic plant installed on the roofs of family housing.
Another generous wind supporter gradually bowing off stage is Hesse. It started supporting wind in earnest in 1993. After providing aid for the installation of 7.3 MW that year, it moved up to 18.6 MW in 1994 and 24.6 MW in 1995. In the first eight months of 1996 alone, Hesse has provided DEM 6.15 million to 15 projects with 56 turbines (25.2 MW). But even though the volume of support (and wind capacity) has been rising, Hesse is already reducing its flow of cash. In the early days, support was paid out at a rate as high as DEM 2500 per kW. By 1993, it had dropped to DEM 1000/kW and at the end of August this year the average was just DEM 240/kW. Extrapolating this development, it looks as though Hesse support for wind energy will reach zero by 1998 or 1999. With the 1997 budget discussions only just getting underway, it is not clear what Hesse will spend on wind next year, but the odds are that the sum will not be raised.
xAdding to the diversity of Länder support philosophies, North Rhine Westfalia (NRW), Germany's most densely populated and highly industrialised state, has given its renewable support efforts a new and imposing profile with the so-called Land Initiative Energy for the Future. It is also by far the most generous provider of wind support. The initiative is aimed at drawing together various market incentive philosophies proposed by different ministries, political parties and government officials "to get everyone working together at one table." It includes the REN programme, which between 1988 and 1995 provided DEM 57 million (see table next page). This programme started life within the economy ministry but was transferred to the building ministry in October last year. In 1995 alone, REN had a budget of DEM 33 million, growing to DEM 50 million in 1996. Unusually, REN provides direct support only for wind turbine projects with an investment value of under DEM 1 million. Once beyond this benchmark, projects merely receive support in the form of low interest loans. In 1995, 146 turbines with a total of 61 MW rated capacity were granted DEM 29.6 million in support; DEM 18.6 million was as direct aid and DEM 11 million was paid in cheap loans.
With a budget of DEM 500 million for the next five years, North Rhine Westfalia's energy future initiative not only covers REN, but also, in a separate development, wind demonstration projects under the auspices of the economy ministry. The first such project is the new wind test field at Grevenbroich in which NRW holds a stake. The installation of wind turbines on disused coal tips also classifies as a demonstration of wind energy, according to the economy minister, Wolfgang Clement. Some 61 tips have been identified which could provide space for around 150 turbines.
Rheinland Palatinate is one of the Länder where potential operators are victims of the stop-go dilemma. Within the first three months of 1996, the land allocated all the money it had available. Since March, no new applications have been accepted and whether any money will be available at all in 1997 "remains to be seen," says an official. The number of projects granted aid annually has risen from seven in 1990 to a peak of 24 in 1995, dropping back to 22 (9 MW) in 1996.
Saxony, in east Germany, too, stopped taking requests for wind support at the beginning of August. Out of a 1996 budget for renewables of DEM 11 million, DEM 2 million was earmarked for wind. During the first six months of 1996, 15 turbines (8.4 MW) installed in Saxony had drained nearly all the support available, taking a total DEM 1.73 million.
Promised land disappoints
Rural Mecklenburg-Vorpommern (MV) on the Baltic coast has not turned out to be the promised land for wind as many had initially hoped. It is now talking of cutting support even before any great inroads have been made into its wind potential. A budget of DEM 10 million has been outlined for boosting the use of geothermal energy, wind and solar plant in 1996, compared with DEM 34 million spent between 1991 and 1995. With respect to wind, the economy ministry says: "In line with the steady improvement in wind turbines and their corresponding profitability, aid will be cut back more and more over the coming years." The generally depressed atmosphere for wind in MV was reflected in the disappointing show at the Rostock Environment trade fair in August, where exhibitors were so downcast at the lack of interest that they issued an official statement. "The wind conference and exhibition has confirmed that in the past years and so it seems, in the future, no purposeful expansion of wind energy use in the land [of Mecklenburg Vorpommern] is possible . . . The firm political will evident in other federal Länder is non-existent here." It adds: "We perceive a danger in that wind planners and manufacturers will have to turn their backs both on the trade fair and the market in Mecklenburg-Vorpommern for economic reasons and the land will thereby lose a potential economic and technology sector."
In contrast to MV, two Länder further south in eastern Germany, Thüringia and Saxony Anhalt, have more buoyant attitudes to wind. In 1995, Saxony Anhalt contributed DEM 6.7 million (up from DEM 4.2 million the year before) for 20 turbines (8.3 MW). The support sum will drop to just DEM 3.4 million in 1996 because of a long delay in granting aid -- enforced by the European Union's tardiness in deciding whether or not such aid was in line with European law. So far just 13 turbines have received support this year, but in 1997 the wind figure is expected to rise again to DEM 6 million, nearly matching the 1995 figure.
Thüringia has had a renewables support programme running since 1991 but decided last year to simplify the rules and that it was time to start "encouraging turbine manufacturers to take a closer look at their prices." The wind section of the new support regulations for "the rational and environmentally friendly use of energy and the utilisation of renewable energies" put a ceiling of DEM 200,000 on single turbines and DEM 300,000 for wind farms. In 1995, DEM 3.2 million was granted to wind projects -- more than initially projected because unused hydro funds were channelled to wind. In 1996 the sum is likely to reach DEM 1.5 million. In each year the total available for the whole programme was DEM 10 million and the economy ministry's energy and technology department hopes the figure for 1997 will stay at around this level.
Dependent on the EU
The prospects of maintaining wind support at its present level in another east German land, Brandenburg, depend on whether European Union (EU) funds are forthcoming for 1996-1999. The economy ministry is awaiting a decision this month, on whether the EU's EFRE fund, which aims to promote the growth of regional economic structures, will support wind. If its application is successful, Brandenburg will receive DEM 4 million a year for four years -- an annual sum it must match each year from its land budget for the promotion of renewables. Under the terms of EFRE support, the four million must flow to small and medium sized companies, in this case renewable operators. Some DEM 6-7 million could flow into supporting wind energy annually. In an immediate bonus, a successful EFRE application would mean extra funds in 1996 already. The ministry had earmarked DEM 18 million for renewables in 1996, of which half was for wind. But its budget was cut by DEM 2 million, reducing wind funds to around DEM 6 million. EFRE funds could push this year's wind budget back up to DEM 8 million. However, if Brandenburg does not receive EFRE funds, the economy ministry pool for renewables will dry up immediately.
Meantime, though, Brandenburg's environment ministry has a renewables support fund. In contrast to the economy ministry, which aids only wind farms, the environment ministry also supports individual turbines. Due to delays in getting funds freed, the environment ministry has only approved applications for 15 turbines this year. These should be operating before the year end, as long as the cash is paid out. In 1997, around DEM 5 million should be available from the environment ministry to support up to 50 turbines.
The city land of Hamburg, Germany's biggest port, ditched its wind energy support regulations at the beginning of 1996, deciding instead to look at each application on a case by case basis. The land pays what it claims to be "what the people need." For wind turbine owners, this approach has its merits. Not only do they receive the usual Electricity Feed Law rate of DEM 0.1721/kWh, but also, under a policy from 1993, an extra DEM 0.10/kWh for ten years from city utility HEW. The utility has also installed three turbines, or 1.15 MW, without public support. For 1996, Hamburg has earmarked DEM 100,000 for a wind farm of six Micon turbines and an application has been made for support for two 500 kW turbines which may go in the ground this year. There are further, vaguer plans for five 800 kW turbines. With regard to the future of wind energy in Hamburg, the problem is not so much finding funds as finding suitable sites. The land policy was to first search for locations in the city where the earlier generation of smaller turbines could be installed. But now the environment office has decide to try its hand at persuading the Hamburg port authorities to take a closer look at their large areas of property. Wind turbines on tall towers will be required to reach over dockside buildings, but as the areas are already industrialised this is not foreseen as a problem. Perhaps surprisingly, in view of the scathing view of wind energy held by many German utilities, HEW meantime seems to be breaking new ground in the search for sites. It has plans to install four 500 kW turbines along the motorway exit to Harburg.
Bremen, on the river Weser, is smaller but has similar problems to Hamburg. It is also having trouble finding the money for wind support. "As budgets are squeezed to nothing, wind support is more or less the only programme out of an original seven that I have left," says Almut Kirchner, responsible for energy support programmes at the environment ministry. Despite being only a small, "two-town land," Bremen has many industrial sites with room for up to 60 MW of wind. "Once certain problems have been solved, such as blades shedding ice in winter, why shouldn't turbines be installed on car parks and commercial property?" she asks. At prime wind sites like the port of Bremerhaven, use of wind energy could help to alleviate the symptoms of the dying ship industry, she adds.
Ready and willing
The story is quite another at the other end of the country. In southern Bavaria cash is ready and waiting for would-be wind turbine operators if, that is, they manage to jump the licensing hurdles. Ironically, considering the environmental benefits of wind energy, strict environmental protection regulations in Bavaria rule out more wind project applications than they allow.
The tiny land of Saarland, with coal mining and steel mills dominating the industrial landscape, has also been able to fulfil the needs of most wind support applicants. Further to the 12 turbines now supported, a further ten units are pencilled in for future support over the next two or three years. Ideally, Saarland would like to set up a "wind fund " fed by the Saarland utilities through a surcharge of around DEM 0.03/kWh. This would be in addition to the premium payments required of utilities for wind under the Electricity Feed Law. The wind fund would be used to provide support for wind projects. Unfortunately in view of utility antagonism to the EFL, the chances of the wind fund ever being constituted look slim.
In the neighbouring land of Baden-Wuerttemberg, potential operators are suffering from what appears to be a dilettantic approach to wind support. A renewables support programme was introduced in December 1995, only to be hit by a budget freeze introduced by the new government, which came to power in March 1996. Now, the new land economy minister, Walter Döring, has announced a new programme for renewables based on the payment of low interest loans -- but support promised under the short-lived old programme has been withdrawn, even though several projects went ahead after being promised aid.