Various news agencies and green energy media outlets reported in late April that Germany’s coalition government had passed a measure to significantly increase the scale of its renewable energy tenders for 2022. Specifically, the tendered capacity that is permitted for solar PV for the next year has been raised by around 4GW from the original 1.9GW to 6GW. Also, the tendered capacity that is permitted for onshore wind power for the same year has also been raised from the original 2.9GW to 4GW.
Furthermore, the German government has cut the levy that is used to finance the projects, programs, and FIT payments under the country’s Renewable Energy Sources Act (German: Erneuerbare-Energien-Gesetz or EEG). This levy has been implemented as a surcharge in consumers’ electricity bills. Previously, the parties in the coalition government agreed that a portion of the federal government’s budget will be used to partially offset the cost of supporting EEG. Furthermore, the levy will be reduced by EUR 0.0025/kWh to EUR 0.065/kWh for 2021 and by EUR 0.005/kWh to EUR 0.06/kWh for 2022. This April, Federal Minister for Economic Affairs and Energy Peter Altmaier announced that the levy will be capped at EUR 0.05/kWh for 2023 and 2024.
The domestic reactions to this attempt to boost renewable generation are mixed. The German Solar Industry Association (German: Bundesverband Solarwirtschaft or BSW-Solar) stated that while it “welcomed” this decision by the coalition government, the one-time increase in the tendered capacity is still not enough. BSW-Solar also pointed out that the EU climate target has been raised recently. In order to meet the new and more ambitious EU climate target, Germany will have to double its PV generation capacity by 2030. BSW-Solar now calls for further revisions to EEG and a continuous increase in domestic PV installations by an annual rate of 10GW.
The German Renewable Energy Federation (German: Bundesverband Erneuerbare Energie or BEE), which is the umbrella organization for the industry associations in the country’s renewable energy sector, agreed that the federal government is moving in the right direction. Like BSW-Solar, BEE said that the latest expansion in the tendered capacity is too little of a contribution to help the country meet the EU climate target. BEE is also asking the government to immediately update EEG so that it fully aligns with the wider regional goals related to energy transition and climate change. More concretely, BEE wants to raise the domestic PV generation capacity to a total of 205GW and the domestic wind generation capacity to a total of 95GW.
Local media and renewable energy industry associations also identified various other issues in Germany’s electricity market. Critics said that capping the levy for EEG does not actually resolve the contradiction that the surcharge on the electricity bill is rising while the cost of renewable generation is falling. To make the electricity market more suited for buying and selling renewable generation, the government needs to significantly reform the rules on various taxes, levies, and surcharges.
