Germany: New guidelines for PV pilot tender

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The Federal Ministry of Economic Affairs and Energy has begun to outline guidelines for the country’s PV pilot tender aimed at ground-mounted installations in consultation with various government departments. The government aims to shift subsidy programs for renewable energy from feed-in tariffs and market premiums to tenders in the coming years. The guidelines, a draft of which is in the possession of pv magazine, is intended to regulate the planned pilot tender process for ground-mounted photovoltaic systems as approved in the government’s coalition agreement and in the Renewable Energy Act (EEG) amendment.

According to the regulatory outline, the tender is to be structured as simple, transparent and understandable as possible. "The need for regulation is nevertheless considerable in order to ensure a fair procedure and the conflicting interests of cost efficiency, implementation levels, player diversity and approval must be brought together in a balanced way." The guidelines currently provide, amongst other things, for the following rules:

The Federal Network Agency will auction an annual volume of 600 MW in three bidding rounds of 200 MW each. Participants will bid on the “value to be invested” for the sliding market premium. "It is this value alone that matters as far as approval is concerned,” says the paper. “Further requirements should remain regulated by sectoral laws; the other Renewable Energy Act 2014 requirements are to be met."

Special land categories will no longer be specified as "restrictions in land setting would reduce the offer, thereby increasing support costs.” At the same time the maximum size of a project will be limited to 10 MW, corresponding to a maximum area of 20 hectares. The document states: "By limiting the tender volume and the maximum size, excessive land use, as existed in the past, will be prevented in the future. At the same time, suitable measures will ensure that projects will be distributed over a large area and not concentrated in one region."

In the bidding rounds, bidders must apply with specific projects that are backed by at least one approval for a development plan. The tender submission must be accompanied by a deposit of €4 per kilowatt as a deposit and a fee payment; with more advanced planning that includes a zoning permit), the deposit will be halved. Initially onetime, concealed bids will be submitted, setting the funding level which cannot then subsequently be altered by the bidder (pay-as-bid). From the third round of bids onwards the unit price method (uniform pricing) will be adopted. The awarding authority, the Federal Network Agency, can thereby determine the current market price, which is then to be paid for all winning projects. In addition, a "more ambitious maximum price" will be put in effect, corresponding to the value to be applied, as stipulated by the Renewable Energy Act, for roof systems with a capacity of up to 1 MW.

The current guidelines assume that the tender structure is simple and understandable, thereby enabling the participation of many bidders. "For this reason, special regulations for citizens’ projects are not required."

The Federal Network Agency is to announce the invitation to tender at least eight weeks in advance; according to the document, the bids are to be considered and awarded within two weeks. Furthermore, a reserve procedure is envisaged. Bidders may not transfer any grant funding received to another person and must submit a deposit of €50, cash or bank guarantee, per kilowatt after approval is granted. This value will also be halved if planning is more advanced. Projects are to be completed within 18 months, with delays leading to at least a contractual penalty: "If the project has not been completed after 24 months, the grant funding will be revoked and the security deposit forfeited in full.” During commissioning it must be shown that the project was built on the site specified in the bidding. If the project was completed elsewhere, the funding level will be reduced by €0.03 per kilowatt hour (transference penalty)."

German Minister for Economic Affairs and Energy Sigmar Gabriel is aiming to have the regulatory framework for the tender pilot process completed as quickly as possible and approved this year. The testing procedure for ground-mounted photovoltaic systems is planned for the coming year and should deliver findings to convert the entire funding of renewables to tenders from 2017.