German government bonds headed for a second weekly gain as stock markets declined amid concern that Greece will default on its debt, fueling demand for the region’s safest securities.
The 10-year bund yield was within two basis points of a five-month low as Greek Prime Minister George Papandreou failed to win support in parliament for more austerity. The two-year note yield was within two basis points of the lowest since Feb. 22. The MSCI Asia Pacific Index of stocks fell for a third straight day, losing 0.5 percent, while Japan’s Nikkei 225 (NKY) Stock Average index dropped 0.6 percent.
The 10-year bund yield was little changed at 2.92 percent as of 8:17 a.m. in London, down four basis points from June 10. It reached 2.91 percent yesterday, the lowest since Jan. 11. The 3.25 percent security due July 2021 fell 0.035, or 35 euro cents per 1,000-euro ($1,417) face amount, to 102.82. Yields on two- year notes were at 1.45 percent. They dropped to 1.43 percent yesterday.
German government bonds have returned 0.7 percent this year, according to indexes compiled by the European Federation of Financial Analysts Societies and Bloomberg, while Treasuries have returned a gain of 3.4 percent. Greek debt has lost 20 percent, the indexes show.
To contact the reporter on this story: Lukanyo Mnyanda in Edinburgh News at lmnyanda@bloomberg.net
To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net
Investing in the future of energy is in all our long-term interests but, for those with foresight, the monetary returns could occur sooner than you think.
Friday, June 17, 2011
Germans scrap FIT reduction
The German government scrapped plans to reduce subsidized power prices paid for photovoltaic energy in July because new installations fell short of the level needed to trigger a cut.
About 700 megawatts of solar modules were installed in March through May and more than 875 megawatts would have been necessary to force a reduction, the Federal Network Agency said today in a statement. Under a law passed in January, the forecast for the year based on these three months needed to be more than 3.5 gigawatts to demand the July cut. Rates are still set to be reduced by as much as 24 percent in January 2012.
“The implications are significant,” Jenny Chase, lead solar analyst at Bloomberg New Energy Finance, said in an e- mail. “Chances are that by postponing the one-off cut, the government will ensure another year of 6 gigawatts to 7 gigawatts, overshooting its target again, and the cut will happen in the third quarter instead.”
Germany, the world’s largest solar market, installed 7.4 gigawatts of solar power last year as developers were spurred by its subsidized rate for clean energy known as a feed-in-tariff. The government had planned in July to advance 3 to 15 percent of the cut scheduled January 2012 to prevent a similar boom.
The new installation figures show that there is no room for further cuts to solar subsidies, according to Carsten Koernig, managing director of BSW, the German solar industry trade group. The industry hopes to install 5 gigawatts of solar capacity in Germany this year, he said by phone today.
To contact the reporters on this story: Marc Roca in London at mroca6@bloomberg.net; Stefan Nicola in Berlin at snicola2@bloomberg.net.
To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net.
http://www.bloomberg.com/news/2011-06-16/germany-won-t-cut-subsidies-for-solar-panels-starting-after-july.html
About 700 megawatts of solar modules were installed in March through May and more than 875 megawatts would have been necessary to force a reduction, the Federal Network Agency said today in a statement. Under a law passed in January, the forecast for the year based on these three months needed to be more than 3.5 gigawatts to demand the July cut. Rates are still set to be reduced by as much as 24 percent in January 2012.
“The implications are significant,” Jenny Chase, lead solar analyst at Bloomberg New Energy Finance, said in an e- mail. “Chances are that by postponing the one-off cut, the government will ensure another year of 6 gigawatts to 7 gigawatts, overshooting its target again, and the cut will happen in the third quarter instead.”
Germany, the world’s largest solar market, installed 7.4 gigawatts of solar power last year as developers were spurred by its subsidized rate for clean energy known as a feed-in-tariff. The government had planned in July to advance 3 to 15 percent of the cut scheduled January 2012 to prevent a similar boom.
The new installation figures show that there is no room for further cuts to solar subsidies, according to Carsten Koernig, managing director of BSW, the German solar industry trade group. The industry hopes to install 5 gigawatts of solar capacity in Germany this year, he said by phone today.
To contact the reporters on this story: Marc Roca in London at mroca6@bloomberg.net; Stefan Nicola in Berlin at snicola2@bloomberg.net.
To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net.
http://www.bloomberg.com/news/2011-06-16/germany-won-t-cut-subsidies-for-solar-panels-starting-after-july.html
Germany FIT not to be reduced for 2011
Germany’s Federal Environment Ministry has confirmed that the installed photovoltaic capacity between March and May of this year amounts to around 700 megawatts. Nevertheless, the economic wing still wants to cap the market.
While it looks like Germany's photovoltaic FITs won't be cut, there is uncertainty over how much installed capacity will be added throughout the year.
The feed-in tariffs in Germany won’t be cut on July 1. "Only 700 MW were installed," Environment Secretary Katherina Reiche (CDU) told Thursday’s Financial Times Deutschland. This figure has been confirmed by the Germany grid agency (Bundesnetzagentur).
As such, expectations are that a projected 2.8 gigawatts will be installed throughout 2011. This figure falls rather short of industry expectations, however, as pv magazine heard during this year’s Intersolar Europe, held last week in Munich, that between 4.5 to five GW worth of photovoltaic systems will be installed this year.
Furthermore, analysts at Jefferies & Company believe that between five and six GW could be installed. In an industry note issued, they commented: "Our estimates are still for 5.5 GW this year in Germany. We recently polled some 50 industry participants throughout the value chain at Intersolar in Munich last week with consensus sticking to five to six GW for the year."
If just 2.8 GW are installed, this would even be less capacity than the government had originally envisioned in its targets, which had projected between three and 3.5 GW.
"The clear market decrease in the past months shows that no clearance exists for a still faster sinking of solar electricity," explained Carsten Körnig, managing director of Germany’s solar association, BSW-Solar. He warned the government, with an eye on the upcoming amendments to Germany’s renewable energy law (EEG), against further cutting the country’s solar incentives.
While it looks like Germany's photovoltaic FITs won't be cut, there is uncertainty over how much installed capacity will be added throughout the year.
The feed-in tariffs in Germany won’t be cut on July 1. "Only 700 MW were installed," Environment Secretary Katherina Reiche (CDU) told Thursday’s Financial Times Deutschland. This figure has been confirmed by the Germany grid agency (Bundesnetzagentur).
As such, expectations are that a projected 2.8 gigawatts will be installed throughout 2011. This figure falls rather short of industry expectations, however, as pv magazine heard during this year’s Intersolar Europe, held last week in Munich, that between 4.5 to five GW worth of photovoltaic systems will be installed this year.
Furthermore, analysts at Jefferies & Company believe that between five and six GW could be installed. In an industry note issued, they commented: "Our estimates are still for 5.5 GW this year in Germany. We recently polled some 50 industry participants throughout the value chain at Intersolar in Munich last week with consensus sticking to five to six GW for the year."
If just 2.8 GW are installed, this would even be less capacity than the government had originally envisioned in its targets, which had projected between three and 3.5 GW.
"The clear market decrease in the past months shows that no clearance exists for a still faster sinking of solar electricity," explained Carsten Körnig, managing director of Germany’s solar association, BSW-Solar. He warned the government, with an eye on the upcoming amendments to Germany’s renewable energy law (EEG), against further cutting the country’s solar incentives.
Monday, June 13, 2011
UK Cuts FIT in favour of 50kWp projects
As expected, the government on Thursday announced cuts to the subsidies given to large-scale solar photovoltaic installations. The cuts were introduced in a bid to ensure that the money assigned to the feed-in tariffs (Fits) programme for the period of the current parliament didn't get quickly eaten up by large investor-driven solar systems, leaving nothing for householders and small community projects. As Greg Barker told me last week, "the focus of the current scheme needs to be on the small scale, to get the maximum number of installations".
Given that the total amount of money that can be given out via the Fits is capped, skewing the scheme in favour of small systems is reasonable, but two important questions remain unanswered. First, given the rate of small-scale installations, how long will the Fits funding pot last? Second, why is there a cap in the first place?
The government line on the first of these question is that the issue will be explored during the comprehensive review of the feed-in tariffs, which is already underway. The initial tariff rates were always intended to last only until April 2012, and from that date the rates can be tweaked downwards to ensure that the scheme doesn't exceed its spending cap. The rates "will come down", Barker confirmed when we spoke last week.
But industry insiders claim there's a crisis brewing. Ray Noble, solar specialist for the Renewable Energy Association, says that small and medium-sized systems are going up so fast that – despite yesterday's announcement – virtually the entire budget for the feed-in tariffs could be used by the middle of next year. By then, he says, "it's unlikely they'll have much budget, and there may be no feed-in tariff".
If Noble is correct, the implication for anyone thinking of installing solar at home over the next few years is clear: do it now or risk getting locked out. The message for the solar industry is even starker: be prepared for the possibility that Fits money could dry up completely or almost completely much sooner than thought.
All of which raises the second question: why is there a cap on Fits spending anyway?
The cap was introduced by the coalition as part of last year's government-wide spending review. (The scheme is actually funded by a levy on electricity bills, rather than directly from the coffers of the Department for Energy and Climate Change (Decc), but it's still considered a form of tax and spending, and therefore was reviewed along with the rest of government expenditure.) As far as I can gather, the government line is that a £900m budget was allocated to the Fits when Labour originally set up the scheme in 2010, and all the coalition did was to trim 10% from the part of that budget intended for 2014-15 – a modest concession in the context of much deeper cuts in other areas.
But Labour and the solar industry claim this line is misleading, as the £900m was never intended to be a cap. Shadow energy minister, Huw Irranca-Davies, confirms this. "No cap existed before", he said. "It was an indicative amount, subject to review across Whitehall depending on take-up."
Howard Johns, chair of the Solar Trade Association, claims that the coalition's decision to turn this indicative figure into a hard cap "was pushed through without consultation, based on a spreadsheet that no one had seen".
Why did this happen? Pressure from the Treasury to reduce all public spending is the most obvious answer, but according to some sources the situation was made worse by incompetence within Decc, which would not comment on the 'why' beyond talking about the need to prevent excessive energy bill rises and reiterating that there had been no cap before October's spending review.
During our interview last week, Barker said he would be gathering senior staff from across Decc to reappraise solar in light of developments in cost and technology, and to think creatively about "new pathways" for supporting large-scale solar projects. If the Fits budget does run out sooner than expected, the same team may also find themselves brainstorming new ways to support domestic-scale solar, too – unless, that is, Greg Barker can persuade George Osborne to unlock some extra cash. I wonder what his chances are.
Given that the total amount of money that can be given out via the Fits is capped, skewing the scheme in favour of small systems is reasonable, but two important questions remain unanswered. First, given the rate of small-scale installations, how long will the Fits funding pot last? Second, why is there a cap in the first place?
The government line on the first of these question is that the issue will be explored during the comprehensive review of the feed-in tariffs, which is already underway. The initial tariff rates were always intended to last only until April 2012, and from that date the rates can be tweaked downwards to ensure that the scheme doesn't exceed its spending cap. The rates "will come down", Barker confirmed when we spoke last week.
But industry insiders claim there's a crisis brewing. Ray Noble, solar specialist for the Renewable Energy Association, says that small and medium-sized systems are going up so fast that – despite yesterday's announcement – virtually the entire budget for the feed-in tariffs could be used by the middle of next year. By then, he says, "it's unlikely they'll have much budget, and there may be no feed-in tariff".
If Noble is correct, the implication for anyone thinking of installing solar at home over the next few years is clear: do it now or risk getting locked out. The message for the solar industry is even starker: be prepared for the possibility that Fits money could dry up completely or almost completely much sooner than thought.
All of which raises the second question: why is there a cap on Fits spending anyway?
The cap was introduced by the coalition as part of last year's government-wide spending review. (The scheme is actually funded by a levy on electricity bills, rather than directly from the coffers of the Department for Energy and Climate Change (Decc), but it's still considered a form of tax and spending, and therefore was reviewed along with the rest of government expenditure.) As far as I can gather, the government line is that a £900m budget was allocated to the Fits when Labour originally set up the scheme in 2010, and all the coalition did was to trim 10% from the part of that budget intended for 2014-15 – a modest concession in the context of much deeper cuts in other areas.
But Labour and the solar industry claim this line is misleading, as the £900m was never intended to be a cap. Shadow energy minister, Huw Irranca-Davies, confirms this. "No cap existed before", he said. "It was an indicative amount, subject to review across Whitehall depending on take-up."
Howard Johns, chair of the Solar Trade Association, claims that the coalition's decision to turn this indicative figure into a hard cap "was pushed through without consultation, based on a spreadsheet that no one had seen".
Why did this happen? Pressure from the Treasury to reduce all public spending is the most obvious answer, but according to some sources the situation was made worse by incompetence within Decc, which would not comment on the 'why' beyond talking about the need to prevent excessive energy bill rises and reiterating that there had been no cap before October's spending review.
During our interview last week, Barker said he would be gathering senior staff from across Decc to reappraise solar in light of developments in cost and technology, and to think creatively about "new pathways" for supporting large-scale solar projects. If the Fits budget does run out sooner than expected, the same team may also find themselves brainstorming new ways to support domestic-scale solar, too – unless, that is, Greg Barker can persuade George Osborne to unlock some extra cash. I wonder what his chances are.
Wednesday, June 8, 2011
Germany Scraps Solar Energy Subsidy Cut as Merkel Exits Nuclear
In a report by Bloomberg Germany has scrapped a planned cut in subsidies paid to solar panel owners as Europe’s biggest electricity market seeks to exit nuclear power, according to a draft law published on the Environment Ministry’s website.
“There are no significant changes for electricity from photovoltaic facilities from those made in 2010,” reads the document, which details scheduled cuts in above-market rates paid to solar panel owners. Environment Minister Norbert Roettgen has said he considered an additional reduction in March next year.
Germany, which uses nuclear for 23 percent of its power, plans to switch to renewable energy output after Japan’s reactor disaster stoked safety concerns. The government is balancing aid for energy from solar panels and wind turbines with the associated cost for citizens and industrial users, who finance the technology’s roll-out through their power bills.
“There is no change of mind,” Roettgen said today in Berlin. “We’re having a discussion about how the degression, which is possible because of technological and market developments in solar, is technically implemented in the law.”
This can be done with one-time reductions, by increasing cuts or by forecasting the installation of technology and the scaling back of subsidies in half-year steps on Jan. 1 and July 1 each year, rather than Jan. 1 of the following year, he said.
The minister told reporters on May 30 that he considered a 6 percent aid cut in March 2012 that would come on top of reductions of as much as 24 percent between July and next January to adapt the subsidy to falling panel prices.
To contact the reporter on this story: Nicholas Comfort in Frankfurt at ncomfort1@bloomberg.net Rainer Buergin in Berlin at bparkin@bloomberg.net
To contact the editors responsible for this story: Will Kennedy at wkennedy3@bloomberg.net James Hertling at jhertling@bloomberg.net
“There are no significant changes for electricity from photovoltaic facilities from those made in 2010,” reads the document, which details scheduled cuts in above-market rates paid to solar panel owners. Environment Minister Norbert Roettgen has said he considered an additional reduction in March next year.
Germany, which uses nuclear for 23 percent of its power, plans to switch to renewable energy output after Japan’s reactor disaster stoked safety concerns. The government is balancing aid for energy from solar panels and wind turbines with the associated cost for citizens and industrial users, who finance the technology’s roll-out through their power bills.
“There is no change of mind,” Roettgen said today in Berlin. “We’re having a discussion about how the degression, which is possible because of technological and market developments in solar, is technically implemented in the law.”
This can be done with one-time reductions, by increasing cuts or by forecasting the installation of technology and the scaling back of subsidies in half-year steps on Jan. 1 and July 1 each year, rather than Jan. 1 of the following year, he said.
The minister told reporters on May 30 that he considered a 6 percent aid cut in March 2012 that would come on top of reductions of as much as 24 percent between July and next January to adapt the subsidy to falling panel prices.
To contact the reporter on this story: Nicholas Comfort in Frankfurt at ncomfort1@bloomberg.net Rainer Buergin in Berlin at bparkin@bloomberg.net
To contact the editors responsible for this story: Will Kennedy at wkennedy3@bloomberg.net James Hertling at jhertling@bloomberg.net
NSW abandons FIT cut
The government of Australian state New South Wales has decided not to implement a previously proposed reduction of its feed-in tariff (FIT), sparking relief from the country’s solar sector.
It had sought to cut the FIT payment by one third to 40 cents from 60 cents and implement this reduction retroactively, but now the state government has taken a u-turn in its decision following pressure from the country’s nascent solar industry.
The UK has similarly proposed to reduce its FIT payments, but the change would not affect previously guaranteed payments under its present government.
New South Wales Premier Barry O’Farrell said this week that he will renege on introducing the rate cut retroactively, according to local reports.
Taking retrospective action calls into question the validity of government guarantees for set power rates under the FIT scheme.
It had sought to cut the FIT payment by one third to 40 cents from 60 cents and implement this reduction retroactively, but now the state government has taken a u-turn in its decision following pressure from the country’s nascent solar industry.
The UK has similarly proposed to reduce its FIT payments, but the change would not affect previously guaranteed payments under its present government.
New South Wales Premier Barry O’Farrell said this week that he will renege on introducing the rate cut retroactively, according to local reports.
Taking retrospective action calls into question the validity of government guarantees for set power rates under the FIT scheme.
What does Germany's no to Nuclear really mean?
Removing one fifth of its power generation facilities is an extraordinary step for Europe’s industrial powerhouse Germany as it pledges to shutdown all its nuclear facilities by 2022.
While the role of nuclear and its building processes have proved controversial and expensive, the technology does supply a large proportion of baseload power to any grid system. The likely outcome of the decision to exit from such a reliable power source will mean the need to replace it with an equally constant type of energy generation. Germany, with an absence of oil, has so far relied on coal-fired power stations as its largest resource, with as much as 50 per cent of its energy demand being met with by this fossil fuel.
The decision to shun nuclear may mean a push towards renewable power sources such as solar and offshore wind. But due to the high levels of intermittency witnessed with both – until energy storage solutions are brought down in price – investment in an alternative, reliable power source seems inevitable.
In theory the fastest, low carbon alternative to providing back up power for the German system would be the construction of more natural gas fired power stations. At a build price of about £800m and a reasonably quick construction time it would appear that the next ten years may see a new dash for gas in Germany.
This may also put even more impetus behind the pressure to build gas pipelines across Europe, with projects such as Nabucco continuing to be high on the energy security agenda.
With German industry gradually coming out of recession, the supply of cheap electricity to power its factories remains vital to such an economic recovery. But with Germany sitting on significant coal reserves, alongside natural gas and offshore wind development, the temptation for the country to expand its carbon capture and storage (CCS) initiative seems compelling.
The major coal player in Germany investing in CCS research and development is Vattenfall, which according to a Reuters report is ‘mulling’ over its flagship project in the east of the country. The German government is also set to develop a legal framework for CCS project development in the coming months.
CCS technology is often described as fledgling, and this is a fair comment. It is not currently a mainstream power solution. However, it must be remembered that the components of the technology are all being used in different places around the world. Piping carbon dioxide (CO²) has, for instance, been taking place for years in North American oil industry.
The technology behind the development of moving CO² in what is termed ‘the dense phase’, that is before it becomes super critical – where a gas under a certain pressure will form a liquid – has been studied and now needs applying to new projects such as Long Gannet in Scotland. Collection and storage of CO² has been commercially proven by Statoil at Sliepner since 1996, where one million tonnes a year have been now been stored in a Saline Aquifer.
Many of these commercial-scale projects do not represent much more than an experiment but with the theory working in practical applications, the main threat to its development appears to be the rising cost of coal-fired power stations and public sentiment to switch to renewables.
It also remains to be seen to see if there is enough geological storage suitable for the housing of such gases. What is clear from the nuclear decision is the power of the green lobby in Germany and its capacity for affecting an extreme policy outcome. Opposition to burning coal in Germany could do for CCS what it has now done for nuclear. Vattenfall and its peers are no doubt watching the space carefully.
http://www.newenergyworldnetwork.com/cleantech-features/by-technology-f/energy-efficiency-f/what-does-germany%e2%80%99s-no-to-nuclear-really-mean.html
While the role of nuclear and its building processes have proved controversial and expensive, the technology does supply a large proportion of baseload power to any grid system. The likely outcome of the decision to exit from such a reliable power source will mean the need to replace it with an equally constant type of energy generation. Germany, with an absence of oil, has so far relied on coal-fired power stations as its largest resource, with as much as 50 per cent of its energy demand being met with by this fossil fuel.
The decision to shun nuclear may mean a push towards renewable power sources such as solar and offshore wind. But due to the high levels of intermittency witnessed with both – until energy storage solutions are brought down in price – investment in an alternative, reliable power source seems inevitable.
In theory the fastest, low carbon alternative to providing back up power for the German system would be the construction of more natural gas fired power stations. At a build price of about £800m and a reasonably quick construction time it would appear that the next ten years may see a new dash for gas in Germany.
This may also put even more impetus behind the pressure to build gas pipelines across Europe, with projects such as Nabucco continuing to be high on the energy security agenda.
With German industry gradually coming out of recession, the supply of cheap electricity to power its factories remains vital to such an economic recovery. But with Germany sitting on significant coal reserves, alongside natural gas and offshore wind development, the temptation for the country to expand its carbon capture and storage (CCS) initiative seems compelling.
The major coal player in Germany investing in CCS research and development is Vattenfall, which according to a Reuters report is ‘mulling’ over its flagship project in the east of the country. The German government is also set to develop a legal framework for CCS project development in the coming months.
CCS technology is often described as fledgling, and this is a fair comment. It is not currently a mainstream power solution. However, it must be remembered that the components of the technology are all being used in different places around the world. Piping carbon dioxide (CO²) has, for instance, been taking place for years in North American oil industry.
The technology behind the development of moving CO² in what is termed ‘the dense phase’, that is before it becomes super critical – where a gas under a certain pressure will form a liquid – has been studied and now needs applying to new projects such as Long Gannet in Scotland. Collection and storage of CO² has been commercially proven by Statoil at Sliepner since 1996, where one million tonnes a year have been now been stored in a Saline Aquifer.
Many of these commercial-scale projects do not represent much more than an experiment but with the theory working in practical applications, the main threat to its development appears to be the rising cost of coal-fired power stations and public sentiment to switch to renewables.
It also remains to be seen to see if there is enough geological storage suitable for the housing of such gases. What is clear from the nuclear decision is the power of the green lobby in Germany and its capacity for affecting an extreme policy outcome. Opposition to burning coal in Germany could do for CCS what it has now done for nuclear. Vattenfall and its peers are no doubt watching the space carefully.
http://www.newenergyworldnetwork.com/cleantech-features/by-technology-f/energy-efficiency-f/what-does-germany%e2%80%99s-no-to-nuclear-really-mean.html
Tuesday, June 7, 2011
Overview of EEG law in Germany
Feed-in tariff (EEG feed-in tariff) as of the 12.01.2011
The most important means to promote electricity from renewable sources in Germany is the feed-in tariff as set out in the EEG.
Promoted technologies
In general, all technologies used in the generation of electricity from renewable sources are eligible for feed-in tariffs (§ 16 par. 1 EEG). The following conditions shall be met:
System registration. In pursuance of the EEG, electricity generated by a renewable energy system is eligible for the feed-in tariff only if the system operator has applied for the system to be registered in the "Register of Installations" (§ 16 par. 2 EEG). The Register of Installations has not yet been introduced. The date of its introduction is yet to be decided on. Systems that generate electricity from solar radiation or from bioliquids must be registered in separate registers.
Systems with a capacity of over 100 kW. Systems with a capacity of over 100 kW are eligible for tariffs only if they are equipped with a technical or operational facility to reduce output by remote means in the event of grid overload and to call up the current electricity exports (§§ 16 par. 6; 6 EEG). Operators of solar installations with a capacity of over 100 kW are also recommended to install a technical facility to reduce output.
Direct selling. System operators that sell their electricity directly are not entitled to the tariff (§ 17 par. 1 sentence 2 EEG). System operators may sell their electricity directly if they report this to the grid operator before the start of the previous calendar month (§ 17 EEG).
Wind energy
Both onshore and offshore generation are eligible with the following exceptions (§§ 29; 31 EEG):
Inefficient onshore generation. Electricity from wind energy is not eligible if generated by systems whose output exceeds 50 KW and for which the system operator provided no proof prior to commissioning that they are able to achieve at least 60 per cent of the reference yield at the planned location (§ 29 par. 3; 4 EEG). This proof shall be furnished by presenting a technical expert opinion (§ 29 par. 4 sentence 1; Annex 5 EEG).Offshore generation in protected areas. Electricity is not eligible if generated by systems located in an area of environmental importance, such as systems constructed in a protected area or at a site of Community importance (§ 31 par. 3 EEG).
Solar energy
Eligible unless one of the following circumstances is present (§§ 32; 33 EEG):
Future production sites. Electricity from a ground-mounted system is eligible only if the system was erected within the territorial application of a formal development plan (e.g. a local development plan). Systems erected within the territorial application of a local development plan drawn up after 01/01/2009 must be located on certain plots of land.
The most important means to promote electricity from renewable sources in Germany is the feed-in tariff as set out in the EEG.
Promoted technologies
In general, all technologies used in the generation of electricity from renewable sources are eligible for feed-in tariffs (§ 16 par. 1 EEG). The following conditions shall be met:
System registration. In pursuance of the EEG, electricity generated by a renewable energy system is eligible for the feed-in tariff only if the system operator has applied for the system to be registered in the "Register of Installations" (§ 16 par. 2 EEG). The Register of Installations has not yet been introduced. The date of its introduction is yet to be decided on. Systems that generate electricity from solar radiation or from bioliquids must be registered in separate registers.
Systems with a capacity of over 100 kW. Systems with a capacity of over 100 kW are eligible for tariffs only if they are equipped with a technical or operational facility to reduce output by remote means in the event of grid overload and to call up the current electricity exports (§§ 16 par. 6; 6 EEG). Operators of solar installations with a capacity of over 100 kW are also recommended to install a technical facility to reduce output.
Direct selling. System operators that sell their electricity directly are not entitled to the tariff (§ 17 par. 1 sentence 2 EEG). System operators may sell their electricity directly if they report this to the grid operator before the start of the previous calendar month (§ 17 EEG).
Wind energy
Both onshore and offshore generation are eligible with the following exceptions (§§ 29; 31 EEG):
Inefficient onshore generation. Electricity from wind energy is not eligible if generated by systems whose output exceeds 50 KW and for which the system operator provided no proof prior to commissioning that they are able to achieve at least 60 per cent of the reference yield at the planned location (§ 29 par. 3; 4 EEG). This proof shall be furnished by presenting a technical expert opinion (§ 29 par. 4 sentence 1; Annex 5 EEG).Offshore generation in protected areas. Electricity is not eligible if generated by systems located in an area of environmental importance, such as systems constructed in a protected area or at a site of Community importance (§ 31 par. 3 EEG).
Solar energy
Eligible unless one of the following circumstances is present (§§ 32; 33 EEG):
Future production sites. Electricity from a ground-mounted system is eligible only if the system was erected within the territorial application of a formal development plan (e.g. a local development plan). Systems erected within the territorial application of a local development plan drawn up after 01/01/2009 must be located on certain plots of land.
Where a solar installation is attached to a building, this building must meet certain statutory requirements (§§ 33, 32 par. 2 EEG).Reporting of installations to the Federal Network Agency.
Electricity from a ground-mounted system or a solar installation attached to a building structure used for the generation of electricity is eligible only if the system operator has reported the location and capacity of the system to the Federal Network Agency (§ 16 par. 2 EEG).
Amount
Calculation. The amount of tariff for a given system is the statutorily fixed tariff minus the degression percentage, which depends on the year in which the system was put into operation. The current version of the EEG sets out the tariffs for 2009.
Differentiation according to technology. The amount of tariff differs for every source of energy (§§ 23 – 33 EEG). For some technologies there are several tariffs depending on the system capacity, the system location and the technology and raw materials used. The more efficient the respective technology is, the more closely the tariff will reflect the market price.
Special system classification if tariff is output-based. In cases where the tariff is based on system output (e.g. photovoltaic energy, biomass), several systems shall be classified as one installation, notwithstanding ownership, and solely for the purpose of determining the tariff to be paid. For this rule to apply, the systems must be located on the same plot of land or in direct spatial proximity, generate electricity from the same kind of renewable energy source and have been commissioned within a period of twelve consecutive calendar months (§ 19 EEG). This regulation aims to prevent system operators from splitting their systems in order to avoid higher output categories. Whether several systems shall be regarded as one will be established on a case-by-case basis.
Criteria for amount of tariff. The amount of tariff depends on the costs of constructing and operating a certain type of plant, i.e. investment costs, operational costs, the costs of measurement and the cost of capital. Cost and efficiency audits are carried out in exceptional cases only. The calculation of the tariff is based on the expected costs. This aims to guarantee the cost-effective operation of most systems.
Solar energy
31.94 – 43.01 €ct/kWh (depending on energy source and system size) (§ 32 par. 1 EEG; § 33 par. 1 EEG).Payment of 25.01 €ct/kWh for electricity the operator uses himself (§ 33 par. 2 EEG).
Degression
The tariffs will be gradually reduced. The degression principle is meant to provide an incentive to reduce costs through technological progress. The tariffs for new systems will be reduced by a legally fixed percentage depending on the year of commissioning and the energy source used (§ 20 EEG). The degression percentage is fixed for all technologies except for electricity from solar radiation. The reference tariff applicable in the year a given system is put into operation is applicable during the entire period in which the tariff is paid. A progress report shall be filed on a regular basis to evaluate the tariffs and recommend adjustments (§ 65 EEG).
Solar energy
The degression rate is statutorily fixed and applies to a statutorily defined capacity of new installations ("regular degression"). When the total capacity of new installations exceeds or falls below a certain amount, the degression percentage increases or decreases by a statutorily fixed number of percentage points ("flexible cap"). The amount of degression differs for roof-top and ground-mounted systems. For example: From 2011 onwards the regular degression for ground-mounted systems will be 9 % (§ 20 par. 2 EEG). According to market developments
in 2011, this percentage will increase by up to 4 percentage points or decrease by up to 3 percentage points.in 2012, this percentage will increase by up to 12 percentage points or decrease by up to 7.5 percentage points (§ 20 par. 3 EEG). Every autumn, the Federal Network Agency will publish the tariffs applicable in the following year on its website http://www.bundesnetzagentur.de/
Amount
Calculation. The amount of tariff for a given system is the statutorily fixed tariff minus the degression percentage, which depends on the year in which the system was put into operation. The current version of the EEG sets out the tariffs for 2009.
Differentiation according to technology. The amount of tariff differs for every source of energy (§§ 23 – 33 EEG). For some technologies there are several tariffs depending on the system capacity, the system location and the technology and raw materials used. The more efficient the respective technology is, the more closely the tariff will reflect the market price.
Special system classification if tariff is output-based. In cases where the tariff is based on system output (e.g. photovoltaic energy, biomass), several systems shall be classified as one installation, notwithstanding ownership, and solely for the purpose of determining the tariff to be paid. For this rule to apply, the systems must be located on the same plot of land or in direct spatial proximity, generate electricity from the same kind of renewable energy source and have been commissioned within a period of twelve consecutive calendar months (§ 19 EEG). This regulation aims to prevent system operators from splitting their systems in order to avoid higher output categories. Whether several systems shall be regarded as one will be established on a case-by-case basis.
Criteria for amount of tariff. The amount of tariff depends on the costs of constructing and operating a certain type of plant, i.e. investment costs, operational costs, the costs of measurement and the cost of capital. Cost and efficiency audits are carried out in exceptional cases only. The calculation of the tariff is based on the expected costs. This aims to guarantee the cost-effective operation of most systems.
Solar energy
31.94 – 43.01 €ct/kWh (depending on energy source and system size) (§ 32 par. 1 EEG; § 33 par. 1 EEG).Payment of 25.01 €ct/kWh for electricity the operator uses himself (§ 33 par. 2 EEG).
Degression
The tariffs will be gradually reduced. The degression principle is meant to provide an incentive to reduce costs through technological progress. The tariffs for new systems will be reduced by a legally fixed percentage depending on the year of commissioning and the energy source used (§ 20 EEG). The degression percentage is fixed for all technologies except for electricity from solar radiation. The reference tariff applicable in the year a given system is put into operation is applicable during the entire period in which the tariff is paid. A progress report shall be filed on a regular basis to evaluate the tariffs and recommend adjustments (§ 65 EEG).
Solar energy
The degression rate is statutorily fixed and applies to a statutorily defined capacity of new installations ("regular degression"). When the total capacity of new installations exceeds or falls below a certain amount, the degression percentage increases or decreases by a statutorily fixed number of percentage points ("flexible cap"). The amount of degression differs for roof-top and ground-mounted systems. For example: From 2011 onwards the regular degression for ground-mounted systems will be 9 % (§ 20 par. 2 EEG). According to market developments
in 2011, this percentage will increase by up to 4 percentage points or decrease by up to 3 percentage points.in 2012, this percentage will increase by up to 12 percentage points or decrease by up to 7.5 percentage points (§ 20 par. 3 EEG). Every autumn, the Federal Network Agency will publish the tariffs applicable in the following year on its website http://www.bundesnetzagentur.de/
Cap
The EEG does not limit the total annual electricity production or the total installed capacity to be covered by the feed-in tariff.
Eligibility period
Duration of payment. Entitlement to the payment of tariffs as guaranteed by the EEG is limited in time and is usually 20 years plus the year of commissioning of the installation. Hydro-electric power stations are subject to a different eligibility period. The tariffs for hydro-electricity from large installations is 15 years plus the year of commissioning of the installation (§ 21 par. 2 EEG).Credit for direct selling. The period in which electricity is sold directly is credited against the duration of the payment of the tariffs (§ 17 par. 1 EEG).
Addressees
The system operator is entitled against the grid operator to the payment of tariffs (§ 16 par. 1 EEG). A system operator is one who, irrespective of the issue of ownership, uses a system to generate electricity from renewable energy sources or from mine gas (§ 3 no. 2 EEG). Grid operators are the operators of grid systems of all voltages for general electricity supply (§ 3 no. 8 EEG). The conclusion of a contract must not be made a condition for the entitlement to tariffs (§ 4 par. 1 EEG).
Procedure
Procedure Statutory law does not provide for a formal tariff procedure. According to the EEG, the conclusion of a contract between the grid operator and the system operator must not be made a condition for the payment of tariffs (§ 4 par. 1 EEG). Only systems generating electricity from solar radiation and systems generating electricity from bioliquids have to complete a registration procedure.
Competent authority The implementation of the EEG is not managed or monitored by a designated authority, as the EEG is a framework for private individuals – system operators and grid operators – rather than authorities. The Act is evaluated by the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety on behalf of the Federal Government (§ 65 EEG).
Cooperation mechanism
The feed-in tariffs will not be used to implement the Flexibility Mechanism.
Funding
Consumer
The costs of the feed-in tariffs are borne by the final consumers.
Distribution mechanism
System operator—grid operator. On the first level, power is transferred from the system operator to the grid operator because of the obligation to purchase electricity and pay tariffs (§§ 8 par. 1, 16 par. 1 EEG).Grid operator – transmission system operator. On the second level, the grid operator is obliged to transfer the electricity received to the transmission system operator without undue delay (§ 34 EEG). The grid operator is entitled to the purchase of and payment for the quantity of electricity he has paid tariff for (§ 35 par. 1 EEG). Transmission system operator – transmission system operator. On the third level, the transmission system operators divide the power as defined by the EEG among themselves according to the quantity of energy and the fees paid (§ 36 par. 1-3 EEG).Transmission system operator – spot market. On the fourth level, the transmission system operators sell electricity from renewable sources on the spot market at the stock exchange price (§ 2 AusglMechV).Transmission grid operator – utility company. On the fifth level, costs are passed on to the utility companies, which are obliged to reimburse the transmission system operators for their costs (§ 3 AusglMechV). Utility companies – final consumers. On the sixth level, which is not explicitly covered by law, the final consumers have to pay their electricity bills, which reflect the amount of power consumed. Final consumers that are manufacturing companies or rail operators are exempt from this regulation. Their costs arising from the compensation payments as specified by the EEG may be reduced upon request ("special equalisation scheme", §§ 40 ff. EEG).
The system operator is entitled against the grid operator to the payment of tariffs (§ 16 par. 1 EEG). A system operator is one who, irrespective of the issue of ownership, uses a system to generate electricity from renewable energy sources or from mine gas (§ 3 no. 2 EEG). Grid operators are the operators of grid systems of all voltages for general electricity supply (§ 3 no. 8 EEG). The conclusion of a contract must not be made a condition for the entitlement to tariffs (§ 4 par. 1 EEG).
Procedure
Procedure Statutory law does not provide for a formal tariff procedure. According to the EEG, the conclusion of a contract between the grid operator and the system operator must not be made a condition for the payment of tariffs (§ 4 par. 1 EEG). Only systems generating electricity from solar radiation and systems generating electricity from bioliquids have to complete a registration procedure.
Competent authority The implementation of the EEG is not managed or monitored by a designated authority, as the EEG is a framework for private individuals – system operators and grid operators – rather than authorities. The Act is evaluated by the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety on behalf of the Federal Government (§ 65 EEG).
Cooperation mechanism
The feed-in tariffs will not be used to implement the Flexibility Mechanism.
Funding
Consumer
The costs of the feed-in tariffs are borne by the final consumers.
Distribution mechanism
System operator—grid operator. On the first level, power is transferred from the system operator to the grid operator because of the obligation to purchase electricity and pay tariffs (§§ 8 par. 1, 16 par. 1 EEG).Grid operator – transmission system operator. On the second level, the grid operator is obliged to transfer the electricity received to the transmission system operator without undue delay (§ 34 EEG). The grid operator is entitled to the purchase of and payment for the quantity of electricity he has paid tariff for (§ 35 par. 1 EEG). Transmission system operator – transmission system operator. On the third level, the transmission system operators divide the power as defined by the EEG among themselves according to the quantity of energy and the fees paid (§ 36 par. 1-3 EEG).Transmission system operator – spot market. On the fourth level, the transmission system operators sell electricity from renewable sources on the spot market at the stock exchange price (§ 2 AusglMechV).Transmission grid operator – utility company. On the fifth level, costs are passed on to the utility companies, which are obliged to reimburse the transmission system operators for their costs (§ 3 AusglMechV). Utility companies – final consumers. On the sixth level, which is not explicitly covered by law, the final consumers have to pay their electricity bills, which reflect the amount of power consumed. Final consumers that are manufacturing companies or rail operators are exempt from this regulation. Their costs arising from the compensation payments as specified by the EEG may be reduced upon request ("special equalisation scheme", §§ 40 ff. EEG).
German Solar FIT may be reduced by 9% on the 1st July
Solas Power has learned that a decision by the German Federal Network Agency as to the scale of the downward revision is yet to be announced, some predictions are that the final scheduled reduction will amount to a nine percent cut on July 1, followed by another on January 1, 2010.
Just last week German Federal Minister for the Environment, Nature Conservation and Nuclear Safety Norbert Röttgen, announced that solar subsidies were to be cut by a further six percent as of March 1, 2012. This reduction had found its way into amendments to the EEG during the departmental approval process. However, reports are that Chancellor Angela Merkel gave a free hand to members of the ruling coalition parties during consultation, and the unscheduled six percent cuts were removed.
This morning the Cabinet of the German federal government discussed and approved the EEG amendments, at the same time deciding to abandon nuclear energy. The result is a phased shutdown of nuclear power plants in Germany by the year 2022.
On Wednesday, the Environmental Committee of the Lower House of Parliament will discuss the amendments to the Renewable Energy Act (EEG). Experts on the topic will then be heard during the public meeting. The law will then be discussed in the Lower House of Parliament and – according to government plans – is to be adopted even before the summer parliamentary recess. Approval by the Upper House of Parliament is not required for the EEG amendments.
Just last week German Federal Minister for the Environment, Nature Conservation and Nuclear Safety Norbert Röttgen, announced that solar subsidies were to be cut by a further six percent as of March 1, 2012. This reduction had found its way into amendments to the EEG during the departmental approval process. However, reports are that Chancellor Angela Merkel gave a free hand to members of the ruling coalition parties during consultation, and the unscheduled six percent cuts were removed.
This morning the Cabinet of the German federal government discussed and approved the EEG amendments, at the same time deciding to abandon nuclear energy. The result is a phased shutdown of nuclear power plants in Germany by the year 2022.
On Wednesday, the Environmental Committee of the Lower House of Parliament will discuss the amendments to the Renewable Energy Act (EEG). Experts on the topic will then be heard during the public meeting. The law will then be discussed in the Lower House of Parliament and – according to government plans – is to be adopted even before the summer parliamentary recess. Approval by the Upper House of Parliament is not required for the EEG amendments.
Monday, June 6, 2011
PV FIT for 2011 may remain unchanged
Solas Power has learned from a German PV expert that it has been mooted that the FIT will go up again. However, this has not been offically confirmed and it is believed that this is not finally decided yet.
Although, the FIT for wind will be very much supported as wind turbines are more efficient and generate more energy.
IT is believed that the FIT for PV will probably be frozen until end of this year but nobody knows when or whether it will really come into force.
This week during the Intersolar in Munich everybody hopes that there will be a final decision made, but politicians are slow and the lobby of the nuclear power is always very strong and in opposition to support renewables.
Although, the FIT for wind will be very much supported as wind turbines are more efficient and generate more energy.
IT is believed that the FIT for PV will probably be frozen until end of this year but nobody knows when or whether it will really come into force.
This week during the Intersolar in Munich everybody hopes that there will be a final decision made, but politicians are slow and the lobby of the nuclear power is always very strong and in opposition to support renewables.
German Givernment drops plans to reduce FIT in March 2012
The German government has dropped its plans to add a further unscheduled cut in incentives for photovoltaic energy in March 2012, according to a draft of the reform of the Renewable Energy Act obtained by Solas Power on Monday.
Environment Minister Norbert Roettgen had said on 30th May that the government was considering cutting the feed-in tariff (FIT), or incentives, for photovoltaic by an additional 6% in March 2012 But in the draft of the Renewable Energy Act's reform there are no longer any plans for a further cut in March 2012.
There are already cuts in the FIT of about nine percent set to take effect on July 1 and then again on 1st January, 2012.
Solar Industry saved from extra Feed-in tariff cuts in Germany
Solar industry saved from extra feed-in tariff cuts in Germany
The German cabinet, under the leadership of Chancellor Angela Merkel has removed controversial proposals to include an extra 6% cut to the German feed-in tariff next year.
The German cabinet, under the leadership of Chancellor Angela Merkel has removed controversial proposals to include an extra 6% cut to the German feed-in tariff next year.
The German cabinet, under the leadership of Chancellor Angela Merkel has removed a controversial proposals to include an extra 6% cut to the German feed-in tariff next year. The German cabinet today agreed on closing all its nuclear power plants between 2015 and 2022. Although wind energy will be supported at higher rates to secure 35% of its energy needs come from renewables, the solar industry retains support but without the extra FiT reductions.
In a week that sees the global PV industry verge on Munich, Germany for Intersolar Europe, a serious concern held by the industry that PV installations in Germany would suffer a serious decline due to the continued cuts has been lifted.
The German cabinet agreement means that on January 1st, 2012 only a 9% cut to the FiT is expected. However, each annual gigawatt of PV installations over the quota of 3.5GW will result in a further 3% cut in the FiT. This will be applied to the 12-months to the end of each September.
A 24% ceiling cut has also been proposed should installations reach over 7.5GW. The same system will also be adopted for 2013, potentially giving much needed mid-term stability to the tariff conditions.
According to a research note from Jeffries International, ‘The German solar market is going to remain the bedrock of global solar at least for the next three years with the minimum annual goal of 3.5GW.’
Ratification is expected later this month
In a week that sees the global PV industry verge on Munich, Germany for Intersolar Europe, a serious concern held by the industry that PV installations in Germany would suffer a serious decline due to the continued cuts has been lifted.
The German cabinet agreement means that on January 1st, 2012 only a 9% cut to the FiT is expected. However, each annual gigawatt of PV installations over the quota of 3.5GW will result in a further 3% cut in the FiT. This will be applied to the 12-months to the end of each September.
A 24% ceiling cut has also been proposed should installations reach over 7.5GW. The same system will also be adopted for 2013, potentially giving much needed mid-term stability to the tariff conditions.
According to a research note from Jeffries International, ‘The German solar market is going to remain the bedrock of global solar at least for the next three years with the minimum annual goal of 3.5GW.’
Ratification is expected later this month
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