Wind energy in Germany
Wind energy in Germany – current market situation and future perspectives
20,301 wind turbines with a total capacity of 23,903 MW were installed in Germany altogether by the end of 2008. 40.4 TWh of wind electricity were generated in 2008. These are 7.5 % of Germany’s net electricity consumption. In 2007, German manufacturers and suppliers contributed to nearly 28 per cent of the total worldwide turnover of 22.1 billion euros. The export quota increased from 74 per cent in 2006 to over 83 per cent in 2007. Together with installation, operation and maintenance services, the wind industry achieved a turnover of more than 7.6 billion euros. The sector employs close to 100,000 people.
The EEG – basis of success for German wind energy
An early feed-in law for wind electricity has existed in Germany since 1991. The Renewable Energy Sources Act (Erneuerbare-Energien-Gesetz / EEG) came into force in 2000. Since then, under EEG regulations electricity produced from renewable energy sources is given priority for grid connection, grid access in either distribution and transmission grid, and power dispatch. Grid operators are obliged to feed in electricity produced from renewable energy and buy it at a minimum price within their supply area. The regulation also introduced a German-wide scheme to equalise these costs incurred by grid operators, as the amount of energy from renewables being fed into the system differs in the various regions. The law was amended during 2008.
For wind energy an ‘initial tariff’ is fixed for at least 5 and up to 20 years. It is reduced to a ‘basic tariff’ depending on how local wind conditions compare to a so called ‘reference yield’. Wind installations on very good sites (reference yield of 150 %) receive the initial tariff for example for five years, while for turbines on lesser sites this period can be extended. The tariffs are altogether paid for 20 years.
As of 1 January 2009 the initial tariff for onshore wind energy was increased to 9.2 cent/kWh. The basic tariff is set at 5.02 cent/kWh. There will be an annual degression of 1 % for new installations every year. The tariff for offshore wind energy got increased to 13 cent/kWh plus an additional ‘sprinter bonus’ of 2 cents/kWh for projects which will come into operation before the end of 2015. The initial 15 cents/kWh will be paid for a period of 12 years. After that, the tariff will decrease to 3.5 cents/kWh. Offshore tariffs will annually decrease at 5 % for new installations starting from 2015.
Grid operators are obliged to feed in electricity produced from renewable energy and buy it at a minimum price within their supply area. Furthermore, the new EEG requires of grid operators not only that they extend the grid, but also that they optimise and enhance the existing grid. Failure to comply with this can lead to claims for damages by anyone willing (but unable) to feed in.
In addition, a bonus for improved grid compatibility (system service bonus) was introduced for new turbines. This makes up for 0.5 cent/kWh on top of the initial remuneration.
A special tariff (repowering bonus) was kept for replacing turbines ten or more years old with turbines with at least double the rated capacity in the same or neighbouring county.
The possibility of changing between EEG-payments and direct marketing is now regulated. Entry and exit of operators that want to sell their production on the electricity market is possible on a monthly basis.
Next to the EEG a continuously important regulation for the success of wind energy development is the German Federal Building Code. Under this law wind energy plants are regarded as so called ‘privileged projects’. Local authorities are asked to designate specific priority zones for wind energy utilisation. However, this means that they can also restrict construction to specific areas (exclusion zones).
FUTURE DEVELOPMENTS – Wind Energy in Germany by 2020
The domestic market has been very stable in recent years and will even rise again once the administrative hurdles such as general distance regulations and height limits have been overcome and construction can continue. This is mainly a political issue. National and Federal State targets for renewable electricity require a growing contribution of wind energy in Germany.
According to calculations from BWE the overall German onshore capacity could be at 45,000 MW, with an additional 10,000 MW offshore wind. With a generation of approximately 150 TWh/year wind energy could deliver 25 % of the German electricity consumption by this time.
Future challenges include a speedy grid expansion with also using underground cable in critical areas. In the meantime it will be important to improve the overall grid transport capacity in Germany through ‘soft’ measures such as temperature monitoring of overhead lines, high temperature conductors, load flow management and other smart grid options. There are ongoing reflections and first projects on improved renewable electricity integration at the regional level with so-called feed-in grids.
In a few years wind power production in addition with other must-run capacity as solar, run-of-river hydro and cogeneration might be higher than consumption in low load times. In some regional grid areas this is the case even today. Therefore, more storage and interconnector capacity is needed. In Southern Germany and neighbouring countries like Austria, Switzerland and Luxemburg new (pumped) hydro storage plants are under construction or in the development phase. Further options for storage and a more flexible power system as demand side management, integrating electric cars, compressed air energy storage and using wind power for heating or fuel production are under investigation.
