Germany Reaches Consensus with European Commission on Energy

Germany has recently been involved in intense negotiations with the European Commission regarding the energy package which has underpinned the countries historic “Energiewende” or transition from traditional sources of energy to sustainable production.

The main issue is that German’s Combined Heat and Power Act, the Electricity Market Act and the 2017 Renewable Energy Sources Act, and whether they are compatible with European state aid rules. The German government now believes that they have reached agreement on the draft legislation.

Minister Gabriel declared: “I greatly welcome the fact that it has proved possible in very intensive but constructive discussions with Commissioner Vestager to achieve a political understanding on three central pieces of energy legislation and their compatibility under state aid rules: the funding of combined heat and power generation, the Electricity Market Act and the 2017 Renewable Energy Sources Act.

There will, however, be changes to (German) national law in order to be compliant with the European Commission talks. This will effect the following areas:

The following is a brief summary from the Federal Ministry for Economic Affairs and Energy / BMWI press release. The full details, please follow the link.

  • Self-supply: Under the Renewable Energy Sources Act (EEG), existing self-supply installations will remain fully exempt from the EEG surcharge.
  • Relief for energy-intensive industries: The CHP surcharge exemptions granted to energy-intensive industries will be shaped in the same way as the special equalisation scheme of the 2017 Renewable Energy Sources Act.
  • Combined Heat and Power Act (CHP Act): CHP funding for small installations between 1 and 50 MW will be auctioned. The auctions will commence in the winter of 2017/18.
  • 2017 Renewable Energy Sources Act: Joint auctions for onshore wind and PV will trial cross-technology auctions.
  • In addition, Germany will undertake an innovation auction of 50 MW of capacity each year for installations which are especially useful to the system.

Electricity Market Act

  • Capacity reserve: A systemic analysis will be carried out in the autumn. To the extent that this confirms the need for a capacity reserve, the capacity reserve will be introduced and launched as envisaged by the Electricity Market Act.
  • Grid reserve: The existing grid reserve system will be continued. However, its size is to be reduced via various measures.

Photo credit: “”. Material used in the preparation of this article has been drawn from the Federal Ministry for Economic Affairs and Energy (BMWI).

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