Wind and solar plant symbolizes EEG 2016; source: BMWi/Holger Vonderlind

© BMWi/Holger Vonderlind

The Federal Cabinet has adopted the reform of the Renewable Energy Sources Act (only in german) (PDF: 295 KB) presented by Sigmar Gabriel, Federal Ministry for Economic Affairs and Energy. This will permit the further expansion of renewables in a controlled manner, synchronise their expansion with the upgrading of the grid, and set the level of subsidies for them in market-based auctions.

Minister Gabriel said: "Today's cabinet decision permits a paradigm shift in the funding of renewable energy. We can now move onto the next phase of the energy transition. The expansion of renewable energy continues to be one of the key pillars of the energy transition. We want to increase the share of renewable energy from its present level of around 33% up to 40-45% in 2025 and to 55-60% in 2035. The 2016 Renewable Energy Sources Act is the key instrument to achieve these targets via effective annual quantitative steering and to bring renewables closer to the market. More competition, a continuous expansion with effective steering, restrictions on costs, stakeholder diversity and dovetailing with grid expansion - these are the coordinates for the next phase of the energy transition. Far from putting the brakes on the urgently needed grid expansion, the priority being given to underground powerlines will rather serve as an ice-breaker."

Core principles:

1. Competitive auctions steer the expansion and limit the costs

In future, the level of funding will no longer be fixed by the state, but will rather be determined on the market by auction. We have set annual quantities to be auctioned for each technology:

  • Onshore wind:
    In the case of onshore wind energy, a gross amount of 2,800 megawatts (MW) is to be auctioned each year over the next three years (2017, 2018 and 2019). After this, the quantity up for auction will rise to 2,900 MW/year (gross). The excessively high amount of new wind energy capacity installed over the last two years meant that existing expansion corridor was not adhered to. We are therefore adapting the rules: we are stipulating the quantity up for auction, imposing a one-off 5% degression as of 1 June 2017 - for the 2017 and 2018 transition period in which the feed-in tariff still applies - and adjusting the breathing cap in case the amount of newbuild exceeds the corridor before the auction-based quantitative steering takes effect. This will help to prevent market distortions due to newbuild plans being brought forward.
  • Photovoltaics:
    600 MW will be auctioned each year. The previous figure was 400 MW. In addition to ground-mounted installations, other large PV installations from 750 kW upwards will be included: i.e. all the large PV installations will compete for funding.
  • Offshore wind:
    We will stick to the target of 15,000 MW of installed capacity in 2030. In order to achieve a steady expansion curve, we will distribute the amounts up for auction equally over the years 2021 to 2030, with an annual volume of 730 MW. Also, the Federal Government and the Länder agree that, in the case of offshore wind, the grid connection needs to be ensured both offshore and onshore, whilst at the same time there must not be a sudden interruption in the development of the industry.
  • Biomass:
    A compromise was reached on biomass at the last coalition committee. It consists of the following points: 150 MW up for auction (new and existing installations) each year in 2017, 2018 and 2019. 200 MW will be auctioned annually from 2020 to 2022. The quantities to be auctioned in the ensuing years will be set in the next revision of the Renewable Energy Sources Act.

2. Maintaining stakeholder diversit

The 2016 Renewable Energy Sources Act will maintain the level of stakeholder diversity. Small installations of up to 750 kW will be exempted from the auction process. In the case of auctions for onshore wind energy, relaxed rules will apply to citizens’ energy companies in order to give them a fair chance. The general approach to designing the auctions has - wherever possible - opted for the variant which is better for stakeholder diversity.y

3. Better dovetailing of the expansion of renewables and of the grid

The Federal Government and the Länder are sticking to the existing grid expansion plans. However, the pace of work needs to pick up. Faster grid expansion reduces the costs of expanding renewables and makes it socially and economically viable.

Nevertheless, there will be bottlenecks in the transmission grid in some regions of Germany during a transition period. This is particularly true of northern Germany. For this reason, during the transition period the expansion of onshore wind energy will be subject to local adjustments where there are greater bottlenecks in the grid. This means that the quantity up for auction in northern Germany will be set at the rate of 58% of the average newbuild in 2013-2015. The remaining quantities scheduled for expansion will not be lost, but will be redistributed across the rest of Germany.

The bill will now be sent to the Bundestag and the Bundesrat. The aim is a swift conclusion to the parliamentary procedures.