Germany unveils major electricity sector revamp, significantly boosting renewables goals

Pictured: Rooftop solar installations in Freiburg

The ruling three-party coalition has agreed to aim for 80% renewable electricity by 2030, with full carbon neutrality in the power sector expected to be reached by 2035. To achieve this, the government presented a comprehensive package aimed at reinvigorating its faltering renewable power sector.

“The package is an accelerator for the expansion of renewable energies,” said Robert Habeck, vice-chancellor and minister for the economy and climate action. “Within less than a decade, we will almost double the share of renewables in gross energy consumption,” he added.

Wednesday’s ‘Easter package’, as it was dubbed, “has been given double urgency in the face of Russia’s unlawful attack on Ukraine,” Habeck said.

To get there, no less than five laws are being changed, some of which had remained untouched for decades: the renewable energy law (EEG) which kickstarted Germany’s famous Energiewende, the offshore wind law, the Energy Act, the federal law on electricity grids, and the Grid Expansion Acceleration Act.

Changes in the renewable energy law

The centrepiece of the package is the country’s 80% renewable electricity goal for 2030. This means a minimum of 600 terawatt-hours per year will need to come from renewables.

The renewable energy law will codify the government’s goal of having a climate-neutral electricity sector by 2035. To achieve this, the government will declare that renewables are an “overriding public good” that serves the public interest. While this may look like legalese, it should translate into faster permits for renewable energy projects like new wind farms.

The impact of this should not be underestimated. “In the many previous EEG amendments, the Bundestag’s main concern was always to prevent the worst from happening in terms of slowing down and blocking renewable energies,” explained Oliver Krischer, state secretary at Habeck’s ministry.

“For the first time in a very long time, a  federal government is not slowing down the pace by law but, on the contrary, massively accelerating it,” the Green politician added.

Nonetheless, this will not prevent environmental NGOs from suing the government against wind power projects.

Renewable energy tenders, which have largely been undersubscribed in recent years, will also become much more ambitious. Onshore wind energy tenders will be quadrupled from 2022 to 2025, peaking at 10GW of additional tender capacity per year in the near future.

Tender volumes for solar power will also be ramped up, rising from around 6GW in 2022 to reach 22GW as of 2026 and until 2035 at least.

But there’s good news for private wind power and rooftop solar too, as citizen’s projects of up to 18MW and solar projects of up to 6MW will be exempted from tendering procedures. The government cited limitations under EU law for not putting the threshold even lower.

Rooftop solar will pay better as well, as rewards for feeding green electricity into the grid will be raised as of 2022. And the rewards will be even higher If households do not use their rooftop solar electricity personally.

The law will also add extra types of common solar installations, recognising Agri-PV, floating-PV as well as peatland-PV. Solar panels on agricultural land and peatlands will even be paid more in order to make them competitive with other potential uses of the land.

In order to boost storage solutions, the law will also create a framework for funding research on different forms of energy storage, with a special focus on hydrogen.

Changes to offshore wind framework

While the goal of massively increasing offshore wind capacity had been made public a while ago, the law will be changed to reflect the country’s new ambition: 30GW by 2030, 40GW by 2035 and 70GW by 2045. Tender plans too will be changed to reflect the increase.

Like onshore renewables, developing offshore wind projects will be labelled an overriding public objective, which will give them a chance to be built in environmentally protected areas provided they pass an ecological test.

On the finance side, the German government will ensure the economic viability of offshore wind projects through a strike power price laid out in so-called “contracts for difference”: if prices are below the guaranteed price, project developers will be supported with public money, and if they higher, the government will use the additional funds to finance other renewable energy projects.

In order to boost offshore wind, the Germans will additionally allow operators to bid in new, previously unexploited areas. Generally, before offshore wind bids can be made in a new area, it is subject to an in-depth exploration by the Federal Maritime and Hydrographic Agency.

The government will now allow companies to skip this step, and conduct their own exploration in exchange for a bid that will be assessed against their energy generation potential, whether the electricity will have stable buyers, ecological criteria and the recyclability of turbine blades.

70% of the bid will go to future offshore wind projects, 20% to nature protection and 10% will go towards sustainable fisheries. In effect, the government wants to cover all potential damages to the environment and fisheries caused by construction on unexplored seabed by compensating them with a flat sum.

Changes to the energy act and the grid laws

To fight rising energy prices, the German government also introduces new sweeping consumer protection rules, while the federal network agency will be granted additional market supervisory powers.

Following the changes, stopping energy deliveries to customers will require a three-month notice period while electricity price structures will have to become more transparent.

On the network side, the government will recognise 19 power grid expansion projects. Additionally, the German goal of 2045 climate neutrality will be included in the relevant laws, making climate neutrality the overarching aim of grid development.

To speed up grid expansion, certain administrative steps will be folded together. Yet, with lawsuits against grid projects being rather limited, it is likely that Habeck’s famed “early and as intensive as possible” public consultation process will be used in order to lower resistance among the population.

Once-in-a-generation overhaul

Many of these laws haven’t been touched in decades, leading some in the industry to describe the package as a once-in-a-generation revamp.

Kerstin Andreae, managing director of the German Energy Industry Association (BDEW), said the direction of the package was “absolutely positive.” The measures are “urgently needed” to be able to produce more renewable energy, she commented.

The chairman of the German Energy Agency (dena), Andreas Kuhlmann, said the revamp was “the new boost for energy and climate policy many had been waiting for.” However, he warned that the measures will not be enough to reach the government’s climate goals.

Nikolaus J Kurmayer, EurActiv.com

This article first appeared on EurActiv.com, an edie content partner