Germany: Cabinet approves EEG draft

The stalemate in negotiations over the next phase of Germany’s Renewable Energy Act (EEG) appears to have been broken. Angela Merkel’s Cabinet approved today a draft of the new EEG, which will see the country move to a tender process for large scale solar and wind projects and maintain the tax on the self-consumption of PV electricity.

"Today’s cabinet decision clears the way for a paradigm shift in the promotion of renewable energy. Now we can go into the next phase of the energy transition," said Sigmar Gabriel, from the SPD party, the minister for energy and the economy.

Germany has already run some test rounds of its tender process for large scale PV. The EEG draft, approved today, will implement some changes to this process.

All PV arrays, both rooftop, and ground mounted, larger that 750 kW will now have to be developed under the tender process. Initially, it was planned that the tenders were to apply to all solar arrays 1 MW and larger. However, this was reduced to 750 kW after reported intense lobbying from the conventional energy section and some trade unions.

While the outcome of the new EEG will likely be positive for the large scale PV sector, Germany’s PV power plant market segment has been severely depressed; it is likely to negatively affect the wind industry.

Under the draft EEG, 2.8 GW of onshore wind will be tendered until, after which point it will be increased to 2.9 GW. A 2020 target of 15 GW in offshore wind has been set, alongside a 150 MW of biomass to be tendered annually by 2019.

Gabriel confirmed the goal is to increase the share of renewables by 40% to 45% by 2025. With current renewable levels coming in around 33% in Germany, critics have argued that Gabriel and the Merkel government are effectively constraining the expansion of the sector.

"The EEG 2016 is the key instrument to achieve these [renewable] goals with an effective annual rate control to bring more renewables into the market. More competition, a continuous expansion with effective control, limiting the costs, a variety of participants and integration with network expansion – these are the coordinates for the next phase of the energy transition."

The German Solar Industry Association (BSW-Solar) reacted to the new EEG with some positivity, but it was scathing in its remarks about the taxing of self-consumed solar energy.