Projects

General government authorisation

What government authorisations must investors or owners obtain prior to constructing or directly or indirectly transferring or acquiring a renewable energy project?

For the construction and operation of renewable energy projects, the required permits under applicable law must be obtained. These depend on the type of project - for example, construction permits, permits under immission control law, water law permits or mining permits may be required. If an applicant meets the legal requirements for a certain permit, such permit must be granted. As part of the permitting procedure, an environmental impact assessment may be required.

Transferring or acquiring renewable projects is generally possible without authorisation. However, foreign investment control may apply to large projects (see question 22), and transactions may be subject to the general merger control rules.

Offtake arrangements

What type of offtake arrangements are available and typically used for utility-scale renewables projects?

Utility-scale renewables projects will have to participate in ‘direct marketing’ in order to receive EEG remuneration, as explained in question 4. The relevant agreements with offtakers are not regulated, but certain market standards have evolved over time. The sellers of the electricity will usually review the financial standing of the offtaker, and may request payment securities. In most cases, these are bank guarantees; parent company guarantees may also be acceptable. In cases where utility-scale renewables projects directly sell to an end user, such power purchase agreements are not subject to energy regulation.

If the project receives a feed-in tariff - for example, in case of older projects not subject to the direct marketing obligation - the relevant grid operator is the offtaker. In such cases, no agreement is required. There is no payment security, but given that the grid operator can roll the EEG payments that are paid by end consumers by way of the EEG surcharge, the credit risk seems rather limited.

Procurement of offtaker agreements

How are long-term power purchase agreements procured by the offtakers in your jurisdiction? Are they the subject of feed-in tariffs, the subject of multi-project competitive tenders, or are they typically developed through the submission of unsolicited tenders?

Renewable energy projects in most cases do not sell via long-term power purchase agreements. ‘Direct marketing’ agreements are often not concluded for longer terms. Like other types of power purchase agreements (which are not yet prevalent in Germany), these are negotiated agreements not subject to energy regulation. Regarding the market premium payable by the grid operator, see question 4.

Operational authorisation

What government authorisations are required to operate a renewable energy project and sell electricity from renewable energy projects?

The construction and operation of renewable energy projects is subject to the general rules (see question 24). Certain general rules for running a business must be observed, but no specific additional authorisation is required. Electricity suppliers to household customers must submit a notification to the Federal Network Authority.

Decommissioning

Are there legal requirements for the decommissioning of renewable energy projects? Must these requirements be funded by a sinking fund or through other credit enhancements during the operational phase of a renewable energy project?

The permit of the project may request that a plant is decommissioned if it is no longer operational or if the permit has expired, and it may request security for the expected decommissioning costs. Such security is usually provided as a bank guarantee.

Operators of plants for the generation or storage of electrical energy with an installed capacity of 10MW or more have to notify an intended closure to the transmission system operator and the BNetzA at least 12 months in advance. The transmission system operator can request that the operation continue if the plant is required for the stability of the electricity supply.