The German government has recently passed a reform of the German Renewable Energy Act (EEG 2014) in order to further steer the increase of capacity, minimize the cost and enhance market integration of renewables. The aim of the German Government is to increase the share of renewable sources, which is currently around 25% to 40-45% of total electricity production by 2025 and to 55-60% by 2035. The reform of the EEG 2014 entered into force on 1 August 2014. Basic changes are:
- Operators of new installations are obliged to directly market energy produced from renewables and receive a market premium in addition to the sales proceeds, whereas operators of existing installations may choose between direct marketing or a fixed feed-in tariff received from the grid operator.
- The new law contains specific targets for increase of capacity per technology. The support for new installations will decrease faster if the target is met or exceeded, or will be maintained or decrease more slowly if the trajectory of build out is below target.
- The cost for support of renewables is charged by the grid operator to the supplier delivering electricity to end customers, the so called RES-levy or EEG-Umlage. The former act contained a number of exemptions for electricity intensive companies and self-supply of electricity from own installations. Those exemptions have been tightened.
- Finally, the new act already contains the obligation to tender support for renewables as from 2017. A. number of technology specific transitional rules do apply. As a first step, support for ground mounted solar systems will be tendered as from 2015.
On 23 July 2014, the Commission announced that it has decided to approve the EEG 2014 under EU State Aid rules and concluded that the EEG 2014 satisfies the conditions set out in the new Commission Guidelines on state aid for environmental protection and energy. The Commission is satisfied that the measures included in the EEG 2014 will further EU environmental and energy objectives without unduly distorting competition in the single market.
We expect further reforms of the EEG in the near future, in particular to cope with the obligation to tender support for renewables as from 2017.