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

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

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.

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 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

Germans to shut down Nuclear Plants by 2022

Germany's coalition government has announced a reversal of policy that will see all the country's nuclear power plants phased out by 2022.

The decision makes Germany the biggest industrial power to announce plans to give up nuclear energy.

Environment Minister Norbert Rottgen made the announcement following late-night talks.

Chancellor Angela Merkel set up a panel to review nuclear power following the crisis at Fukushima in Japan.

There have been mass anti-nuclear protests across Germany in the wake of March's Fukushima crisis, triggered by an earthquake and tsunami.

'Sustainable energy'

Mr Rottgen said the seven oldest reactors - which were taken offline for a safety review immediately after the Japanese crisis - would never be used again. An eighth plant - the Kruemmel facility in northern Germany, which was already offline and has been plagued by technical problems, would also be shut down for good.

Six others would go offline by 2021 at the latest and the three newest by 2022, he said.

Continue reading the main story
Analysis

Stephen Evans

BBC News, Berlin

--------------------------------------------------------------------------------
Nearly a quarter of German's electricity comes from nuclear power so the question becomes: How do you make up the short-fall?

The official commission which has studied the issue reckons that electricity use can be cut by 10% in the next decade through more efficient machinery and buildings.

The intention is also to increase the share of wind energy. This, though, would mean re-jigging the electricity distribution system because much of the extra wind power would come from farms on the North Sea to replace atomic power stations in the south.

Protest groups are already vocal in the beautiful, forested centre of the country which, they fear, will become a north-south "energie autobahn" of pylons and high-voltage cables.

Some independent analysts believe that coal power will benefit if the wind plans don't deliver what is needed.

And on either side of Germany is France, with its big nuclear industry, and Poland, which has announced an intention to build two nuclear power stations.
Mr Rottgen said: "It's definite. The latest end for the last three nuclear power plants is 2022. There will be no clause for revision."

Mr Rottgen said a tax on spent fuel rods, expected to raise 2.3bn euros (£1.9bn) a year from this year, would remain despite the shutdown.

Mrs Merkel's centre-right Christian Democrats met their junior partners on Sunday after the ethics panel had delivered its conclusions.

Before the meeting she said: "I think we're on a good path but very, very many questions have to be considered.

"If you want to exit something, you also have to prove how the change will work and how we can enter into a durable and sustainable energy provision."

The previous German government - a coalition of the centre-left Social Democrats (SPD) and the Greens - decided to shut down Germany's nuclear power stations by 2021.

However, last September Chancellor Angela Merkel's coalition scrapped those plans - announcing it would extend the life of the country's nuclear reactors by an average of 12 years.

Ministers said they needed to keep nuclear energy as a "bridging technology" to a greener future.

The decision to extend was unpopular in Germany even before the radioactive leaks at the Fukushima plant.

But following Fukushima, Mrs Merkel promptly scrapped her extension plan, and announced a review.

Greens boosted

Germany's nuclear industry has argued that an early shutdown would be hugely damaging to the country's industrial base.

Before March's moratorium on the older power plants, Germany relied on nuclear power for 23% of its energy.

The anti-nuclear drive boosted Germany's Green party, which took control of the Christian Democrat stronghold of Baden-Wuerttemberg, in late March.

Shaun Burnie, nuclear adviser for environmental campaign group Greenpeace International, told the BBC World Service that Germany had already invested heavily in renewable energy.

"The various studies from the Intergovernmental Panel on Climate Change show that renewables could deliver, basically, global electricity by 2050," he said.

"Germany is going to be ahead of the game on that and it is going to make a lot of money, so the message to Germany's industrial competitors is that you can base your energy policy not on nuclear, not on coal, but on renewables."

Shares in German nuclear utilities RWE and E.On fell on the news, though it had been widely expected.

But it was good news for manufacturers of renewable energy infrustructure.

German solar manufacturer, Solarworld, was up 7.6% whilst Danish wind turbine maker Vestas gained more than 3%.

German Green Party move forward in Germany

Germany’s Green party will make its debut in power this May as part of a coalition with the Social Democrats in one of the country’s south-western states.

The centre-left Social Democrat party SPD reportedly signed an agreement with the Greens this week after beating the conservative party for the rein in Baden-Wuerttemberg in March.

Green party politician Winfried Kretschmann will be the party’s first member to lead a German state.

The change follows 58 years of control by the Christian Democrats in the state.

The Green party will have a greater share of power in the state as it led the votes by one percentile point.

Kretschmann said he hopes the coalition seat will become a model for other states in the country, according to reports.

Concerns over nuclear power are thought to have prompted the switch to green leadership. Germany’s Chancellor Angela Merkel has until now supported nuclear power, but put a moratorium on seven nuclear plants following radiation leaks at the Fukushima plant in Japan.

The newly-found power in the hands of the Greens could signal a step-change away from nuclear power in the rest of the country.

German Legal Overview

GERMAN LEGAL FRAMEWORK SOLAS POWER: log onto the German government website for details on the German FIT and legal framework see http://www.res-legal.de/en/search-for-countries/germany.html

Solas Power in negotiations with large EPC

Solas Power is in negotiations with a large EPC to built upwards of 20MW in Germany for the second half of 2011.

Japan's ill wind may blow positives for German Solar

Solas Power has noted that the nuclear power plant crisis unfolding in Japan after the massive earthquake has already caused political fallout in Germany and could usher in a new era of renewable energy in Europe's largest economy.

On Tuesday Germany became the first European country to shut nuclear plants in the wake of the crisis in Japan. The move by the German government to temporarily close seven older plants came just one day after Chancellor Angela Merkel had imposed a three-month moratorium on the extension of the country’s 17 nuclear power stations.

During this time, experts will carry out new security checks at all reactors and, equally important, policymakers in Berlin will debate whether or not to permanently reverse a policy that could have allowed energy companies to extend the operating lives of their reactors for 12 years.

Last year, Merkel’s center-right coalition took the controversial step of prolonging the lives of nuclear power stations in a move that the chancellor said would secure the supply of affordable electricity while the country converts to renewable energy sources. That decision reversed an earlier ruling taken by the previous center-left government in 2002 to phase out all nuclear plants by 2021.

Other European governments have been scrambling to step up efforts to assess nuclear safety as well. Switzerland, for instance, has imposed a moratorium on three plants while Finland announced plans to the safety of its nuclear reactors. Along its coastlines, the Nordic country operates seven boiling water reactors of the type affected in Japan.

As European countries and others around the world rethink their nuclear power strategies, traders are shifting their money into renewable energy, solar in particular. German solar panel company, Solarworld AG, is among the biggest beneficiaries; the company has seen its stock soared more than 30 percent since the government announced its decision to shut down seven plants and reassess its long-term nuclear power strategy.

Renewable energy interest groups in Germany are seizing the opportunity to promote alternative energy sources.

"If the federal government is really serious about an accelerated development of renewable energy, it must permanently withdraw the lifetime extension of nuclear power plants and not just for three months," said Dietmar Schutz, president of the German Renewable Energy Federation (BEE). "The extension is not a bridge, but a serious obstacle to the necessary restructuring of our energy system."

Currently, nuclear energy accounts for 23 percent of German energy and renewable energies 16 percent. Schutz said that renewable energies would be able to cover 47 percent of German energy demand by 2020.

Solar energy is developing rapidly in Germany, thanks largely to its favorable feed-in tariffs. Solar capacity is now around 17 GW, with 7 GW added last year alone.

In cloudy Germany, however, the government sees the greatest potential in wind power. At the end of 2009, the country had 21,164 wind power stations with a capacity of 25.7 GW. By 2025, wind power is expected to account for 25 percent of electricity generation. About 40 off-shore wind farms are planned along the country’s northern coastlines with a capacity of 25 GW.

But Germany will have to invest in new grids that can not only transport energy from the new wind parks but are also capable of handling fluctuating levels of wind and solar energy and of managing energy generated by many small facilities spread across the country.

That will cost money and that could be an issue in a country where energy prices have been going nowhere but up. The Japanese nuclear disaster, however, has heightened fears of the technology and strengthened an anti-nuclear lobby and the opposition of the Social Democratic Party (SPD) and Green Party ahead of upcoming regional elections. Numerous anti-nuclear rallies have taken place across the country.

Germans, who have been closely following the ongoing nuclear catastrophe in Japan, may now be willing to pay more for energy they view as safer and more environmentally friendly.

Source: http://www.renewableenergyworld.com/rea/news/article/2011/03/german-solar-energy-may-get-a-boost-from-japans-nuclear-disaster?cmpid=SolarNL-Tuesday-March22-2011

SOLAR MODULE SALES PRICE of $1 per Watt - no longer theory

Solar module sales price of $1 per Watt no longer theory

Edwin Coot of Solar Plaza has stated that In 2010, the objective is to reach a selling price for solar modules of $1 per Watt,” says Lynn Sha, Vice President of Chinese manufacturer QS Solar. In other words, it will become possible in 2011 to produce solar energy cheaper than the cost of electricity from the grid (“grid parity”), and this is without subsidies.
By Edwin Koot, Solarplaza

Revolutionary price level will mark start of solar revolution
This revolutionary price level could be sufficient to create sustainable growth in the solar energy market (PV) even without the availability of any government incentives. “The solar industry has always claimed that its goal was to attain this level of $1 per Watt. Reaching this benchmark will be the turning point from which markets will emerge and grow without any government aid. It is the start of the solar future,” says Edwin Koot, CEO of SolarPlaza, the global, independent solar energy platform.

Module prices are currently under pressure. Last year’s enormous growth of the solar industry and market by more than 100% was caused by a generous feed-in tariff in Spain. Many new companies started production of solar modules. This year, support in Spain has been decreased and capped. “This could not have come at a more dramatic moment. The simultaneous loss of Spain as a major market, the inevitable industry oversupply, and the financial crisis have pushed down module prices since Q3 last year,” says Koot. “Good for customers, challenging for the industry.”

QS Solar started production of its amorphous silicon thin-film modules last year. “We will bring down the sales price to our goal of $0.75/Wp through the continuous expansion of our production capacity and process optimization.” The company currently has 3 production lines with an installed capacity of 95 MegaWatts, and it plans to increase another 4 lines by 2009, which will lead to a total capacity of 235 MW by next year.

The $1 per Watt level is already sufficient to achieve grid parity in many markets. A lower level might not even be needed to serve an infinite global market potential for photovoltaic solar energy.

Lynn Sha and CEOs from the world's leading PV companies (such as Q-Cells, Suntech Power, Applied Materials, and Akeena Solar) will be discussing the above topics at "The Solar Future" conference organized by SolarPlaza on May 26th in Munich.

About SolarPlaza
SolarPlaza, based in Rotterdam, Netherlands, Solarplaza.com is the independent global platform for knowledge, trade and events for the photovoltaic solar energy (PV) industry.

EEG compromise: PV-funding to be tailored to installed capacity

Solas Power has learned that a heated debate was had in Berlin between branch representatives and members of the German government on the adjustment of solar incentives, a step which can indeed be seen as an earlier than planned reduction. Future feed-in-tariffs (FIT) are to be adjusted in accordance with annual installed capacity. Possible cutbacks are being brought forward to July 1. Market experts see the danger of an artificial stimulation of the market and warn against a misinterpretation of the possible pull-forward effects.

The German solar industry association (BSW-Solar) has agreed to a new compromise on PV funding with the German Federal Ministry for the Environment. The resolution sees further reductions to FIT’s in accordance with the amount of solar electricity installed annually. The expected installed capacity for the year 2011 will be based on the figures for new installations in the period from March to May. By multiplying the result by a factor of four, the Federal Net Agency should then come to a projection of the estimated installed capacity for the year 2011.

Should the calculated PV market capacity be more than 3, 500 MW, further reductions of 3 percent are to be introduced mid-year on July 1. The resolution reached between legislators and BSW-Solar has determined a decline of 6 percent should projected capacity be over 4,500 MW, annually installed capacity of over 5,500 MW would incur cuts of a further 9 percent, more than 6,500 MW by 12 percent and an installed capacity to the same amount as last year, over 7,500 MW, will be subject to a 15 percent reduction. As the planning of open-space plants requires more time, their degression will not come into effect until September 1, 2011.

Funding is, as previously planned, to be cut by a further 9 percent at the turn of the year, 2012. Furthermore, an audit carried out by the Federal Net Agency will verify that the estimations made in spring 2011 were accurate. According to the announcement, subsequent corrections will be made should this be of necessity.

Right Direction – Questionable Impact
Following this announcement, the adjustments presented by Norbert Röttgen, Minister for the Environment and Günter Cramer, president of BSW-Solar are to be sent to parliament for deliberation. A final decision is expected in February. As the country will soon be in the throws of state elections, experts assume that there will not be a lengthy bargaining process on percentage points, as was seen in the year before last.

„The modification of incentives in line with market conditions along with a regular review of tariffs is generally a step in the right direction and is supported by the industry” assessed Markus A.W. Hoehner, CEO of the market research and consulting house EuPD Research. Generally speaking, the fact that tariffs are to be aligned with the figures for installation should also be greeted. However, as to what extent a reduction in FIT’s can contribute to a pacifying of the markets is open to doubt. “The announcement, itself, of an early adjustment on July 1 equates to a simulation of the market,” says the expert and warns against potential pull-forward effects.

Hoehner, a market observer with over a decade of expertise in international markets of renewable energies points out: “The German PV market is still overheated, the reoccurring discussion on amendments to incentives fuels this situation further.” Germany currently finds itself in a dilemma. Without further adjustments the market is threatened by excessive growth, a point which speaks for the measures suggested. Yet a “run” in the first half of the year is likely to overcompensate for the slowdown effects of said adjustments.

„The review of the EEG in 2012 will play a decisive role in the future of photovoltaic in Germany“, believes Markus A.W. Hoehner. “Legislators, industry representatives and stakeholders now face the challenge of developing a concept that encompasses all sources of renewable energy. A clear message on the future of the German renewable energy industry should also be sent to international markets in order to strengthen investment security”. Hoehner sees the tone in which this discussion has taken place as positive. In comparison to last year, there is a greater willingness to enter talks and a clearer course of action can be recognized. Although the current debate may not be crucial to the long-term development of the industry, it certainly shows the direction to be taken. It is imperative that a destabilization of the markets, as seen recently in France, Spain or Czech Republic, is avoided.

Solas Power Outlook

Solas Power has seen that thanks largely to hefty government support, Germany's solar market has become the largest in the world. Germany has installed half the world's solar power every year since 2007, adding 8.8 gigawatts in 2010 alone. The trend is expected to continue in 2011, with German installations providing nearly half the world's 20 new gigawatts, according to data provided by research and analysis firm iSuppli Corp. and confirmed by other analysts.

But things could get shaky in 2012. Revisions to the country's Renewable Energy Sources Act are due in mid-2011. If the powers that be decide to cut "feed-in" tariffs—which encourage homeowners to add their unused alternative energy to the grid—it will put the brakes on Germany's solar surge.

New photovoltaic output is projected to continue growing globally over the next five years, as other key markets offset the relative decline in Germany. Leading the pack will be Italy and the United States. The U.S. market alone will rise almost tenfold, from less than half a gigawatt in 2009 to more than 4 GW in 2014, according to iSuppli. Japan will lead a fivefold increase in Asia. The European Photovoltaic Industry Association also foresees fresh demand from markets such as Canada, China, Greece, India, and the United Kingdom. According to Solarbuzz's 2010 industry report, "even in the slowest growth scenario, the global market will be 2.5 times its current size by 2014."

German Solar "Gold Rush"; Act now to capitalise on this Opportunity

German Solar "Gold Rush" now on, Invest now.

Solas Power has noted that Germany has mooted that the should cap solar power subsidies, cutting payments for new plants once added capacity exceeds 1 gigawatts nationally in any one year, a panel of experts that advisesChancellor Angela Merkel said.

The Berlin-based panel’s findings, released in a 680-page report today, call on Merkel to steadily reduce aid annually as well as apply a cap on subsidizing “overcapacity.” A jump in capacity is pushing up German power prices and squeezing out investments in other renewable energy sources, the panel said.

“A drastic throttling of solar subsidies in coming years is a must,” the panel said. The subsidies are pushing up power prices at a rate that is “endangering the acceptance” of renewable energy, they said. The government forecasts an added 9.5 gigawatts of solar capacity this year, almost 10-fold growth over what the panel said is acceptable.

Merkel’s government is steadily paring solar aid rates to curb the cost to consumers who pay for subsidies in their power bills.

Solar-panel prices fell about 50 percent in the last two years, spurring a boom in new installations on roof-tops and fields and led to a glut on the German market. The government has so far shied from implementing a cap, which solar power federations claim would dry up panel sales.

The findings of the panel will shore up support among lawmakers in Merkel’s Christian Democrats in parliament who want inclusion of a cap on solar subsidies in a revamp of the renewal energy legislation law this year.

The panel’s recommendation of a 1-gigawatt cap “confirms the policy position” of the Christian Democrats, their economic spokesman Joachim Pfeiffer, said in an interview. “We have to look at solar subsidies as well as a cap in the course of amending the renewable energy law,” Pfeiffer said.

Solas Power believes that now is the time to act if investors are to take advantage of the German FIT system and that the window for opportunity is fast closing.

Discussion About Mid-Year Solar Feed-in Tariff Cuts Gathers Momentum

Solas Power News has learned that with massive solar expansion despite regular cuts of feed-in tariffs and rising electricity prices, the debate about further cuts is gathering momentum. However, information about an agreement between the Federal Government and the solar industry is still limited.

According to the news agency Reuters, the ministries involved and the solar industry agreed to bring forward the solar feed-in cuts due at the beginning of next year to July of this year. Cuts could be as high as 12%, depending on the expansion.

Referring to information from dpa, the internet site Verivox, a provider of electricity price comparisons, confirms that additional mid-year cuts of up to 12% are being discussed, but says a spokesperson of Environment Minister Norbert Röttgen (CDU) had pointed out that the details are still to be decided.

A number of papers reported that the solar industry association BSW Solar continues to be strictly opposed to a cap on solar expansion. Thomas Bareiß, energy spokesman of the Christian Democratic Party in the Bundestag, a fellow-party member of Minister Röttgen, has repeatedly called a cap the ultima ratio. At the beginning of the week, Minister Röttgen stressed in the newspaper Weser Kurier that solar feed-in tariffs should pave the way for a market introduction of solar power, but were not intended to become long-term subsidies.

GERMAN FIT TO BE REDUCED FROM 1st July 2011

SOLAS POWER has learned that the Federal Ministry for the Environment (BMU) and the solar industry association BSW Solar jointly presented a proposal to bring forward parts of the regular 2012 solar feed-in tariff cuts to 1 July and 1 September 2011. The July/September reductions up to 15% shall depend on PV capacity installed in March, April and May 2011. The move is due to the continued massive solar expansion and the increasing costs for consumers in the recent past, which triggered criticism from various parties, including consumer protection agencies.


The proposal contains the following main elements:

•The proposed 1 July/1 September 2011 reduction shall bring forward parts of the 2012 degression currently contained in the Renewable Energy Sources Act (EEG);
•For freestanding PV systems, the degression shall be effective 1 September, for other systems it shall be 1 July 2011;
•The July/September reduction will cover the quantity dependent part of the 2012 degression, i.e. the part of the 2012 reduction that depends on the additionally installed capacity in 2011 ( additional 3% above 3,500/4,500/5,500/6,500 MWp);
•For capacity growth exceeding 7,500 MWp, an additional 3% degression shall be introduced. This brings the maximum mid-year reduction to 15% (i.e. 5 times 3%);
•The 9% reduction for 2012 that applies regardless of additionally installed capacity remains unchanged and shall remain to become effective 1 January 2012;
•The 2011 mid-year degression rates will be based on a forecast for which the new capacities of March to May 2011 will be extrapolated for the whole year by the Federal Network Agency;
•For installations starting operation after 1 January 2012, the degression rate shall depend on the actual market growth in 2011 (and not the extrapolated figures used for the July/September 2011 reduction).
Based on this proposal, a hard cap on solar expansion, which had been strictly opposed by the industry association BSW Solar, is off the table for the time being. ”We welcome the decision, which expresses the political commitment with respect to the expansion of photovoltaics, the German production facilities, and the 130,000 jobs created by the industry”, Günther Cramer, President of BSW Solar said.

After having heavily opposed last year’s feed-in tariff cuts, the solar sector itself is in favour of the cuts now proposed, as Björn Klusmann, managing director of the German Renewable Energy Federation (BEE) told the newspaper Frankfurter Allgemeine. Without a further reduction of solar feed-in tariffs, the whole renewables sector might have come under pressure because of the rising electricity prices.

According to BSW Solar, more than 230,000 solar power plants with a total capacity of 7 to 8 GW have been connected to the grid in Germany in 2010. Solar energy meanwhile accounts for about 2% of total final energy consumption. However, almost half of the estimated EUR 13 billion in reallocation charges paid pursuant to the EEG are attributable to solar energy, the newspaper Frankfurter Allgemeine Zeitung writes. With the so-called EEG reallocation charge, consumers have to pay the difference between market prices for renewable energy and the feed-in tariffs pursuant to the EEG.

BMU also proposes to contain the costs of the “Green Power Privilege” (Grünstromprivileg). This relates to an exemption for utilities that supply electricity deriving at least for 50% from renewable energy sources. We will cover this proposal in a separate blog post.

The proposal for the new 2011 feed-in tariff reduction will be presented to the Bundestag for decision, and may be amended during the parliamentary process. Technically, the proposal is likely to be added to an existing proposal to amend the EEG in the context of the European renewable energies directive (Directive 2009/28/EC). This would allow an expedited parliamentary procedure to introduce the 2011 reductions.

GERMANY BACK IN THE FAST LANE

Solas Power has seen from recent reports that German, French and Belgian business sentiment picked up by an unexpectedly high degree at the start of the year, suggesting that Germany’s broadening economic recovery is sustaining manufacturing in other parts of the eurozone.

Germany’s Ifo institute said its business climate index hit 110.3 points in January, up from 109.8 the previous month and its highest level since it started tracking sentiment 20 years ago.

The French statistics agency Insee said its manufacturing sentiment index jumped 6 points to 108, the biggest monthly rise since mid-1999, while Belgium’s central bank said its business confidence tally rose 1.4 points to 4.5. With foreign orders filling Belgian companies’ order books, François Cabau at Barclays Capital said the country’s economic momentum “has a lot to do with the pace of its trading partners – most importantly Germany”.

Economists see Europe’s largest economy growing about 2.5 per cent this year, against forecast French growth of only 1.5 per cent and a Belgian rate of 1.8 per cent as public spending cuts and oil price rises bite.

But some said the uptick in sentiment could be a sign that German demand is sustaining French companies in particular more than expected. The two countries are each other’s biggest export markets.

“German and French companies are powering ahead in Europe, reinforcing the upswing of each other,” said Andreas Rees at UniCredit in Munich. He welcomed the revival “of the good old Franco-German economic axis”.

This would cut Germany’s reliance on exports to Asia, he added. With fewer jobless, stronger private consumption and business investing once more, “one should not exclude” the possibility of German growth nudging 3 per cent.

Carsten Brzeski, economist at ING bank in Brussels, said the Ifo data were “a strong signal” that the German economy would “continue to power ahead” after its stellar growth of 3.6 per cent in 2010.

Last year’s export-led recovery drove unemployment down, spurring private consumption for the first time in years. Now economists are expecting domestic demand to receive a further boost from corporate investment.

“The conditions to initiate a virtuous circle [of growth] have hardly been better in 15 years,” Mr Brzeski said in a note to clients.

The German government on Wednesday forecast that the economy would grow 2.3 per cent this year – up half a point from its autumn forecast – with the average jobless rate falling to 7 per cent from 7.7 per cent in 2010.

Aided by more private spending and corporate investment, domestic consumption would raise GDP by 2 per cent, contributing three-quarters of economic growth, up on a two-thirds share last year.

German FIT Analysis

Figure 1. End-user electricity consumption (gray columns, left Y-axis), and physically measured cumulative feed-in of renewable electricity with EEG incentives (green columns, right Y-axis). 2000 has been measured only from April 1st (BMU spreadsheet). Germany's end-user electricity consumption more or less stabilized in 2005-2008. 2009 has been a global crisis year, with a considerable drop in electricity consumption (Germany: minus 5,6% as compared to 2008). Renewable electricity production under EEG feed-in conditions - almost all fed directly into the net - grew continuously, up till 74,9 TWh in that "crisis" year, with strong to massive (PV) growth of new installations promising more full-year renewable electricity production in coming years. Average growth of EEG production in this period has been 7,2 TWh/year. Year-on-year growth percentage was, on average, 26%.

German Government announces FIT reduction for 2011

Solas Power News - The German Government has reached an agreement with the country’s solar industry to tailor solar photovoltaic (PV) feed-in tariffs to installed capacity.

German FIT Update

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