Germany’s onshore wind auction activity lags despite new renewables law
Germany’s new Renewable Energy Act (EEG) of 2021 is expected to speed up approval and construction of projects, but has yet to support onshore wind auctions – which could award some of the vital capacity needed for the country to achieve its 71 gigawatts (GW) 2030 renewables target. Around 1.5 GW of onshore wind auctions planned for February were delayed due to permitting issues, while in the first two months of 2020, Germany had already awarded 700 megawatts (MW) of capacity. As the country needs to add around 17 GW of new onshore wind capacity to reach its 2030 target, the pace of tenders and auctions must speed up and include support for older onshore wind developments, which require repowering but have, so far, been ignored.
Germany’s Renewable Energy Act 2021
Germany revised its EEG in December 2020. The new act came into force on 1 January and aims to see renewables account for 65% of the country’s energy mix by 2030. In addition to speeding up the approval and construction process of onshore wind farms, the law proposed removing limitations on grid expansion, especially for capacity additions in northern German states – a move designed to encourage developers to actively participate in future auctions. The EEG surcharge, which was due to be paid by consumers, will now be funded through federal subsidy and has been set at $0.077/kWh (EUR 0.065/kWh) for 2021, down by EUR 0.0025/kWh from to the 2020 surcharge price. This will relieve the burden on residential consumers and small-scale and medium scaled companies.
However, the law does not benefit older onshore wind farms, which need repowering in the face of giant renewables targets. These older onshore wind projects can participate only in 1.5 GW worth of auctions in 2021, and 1 GW in 2022, with no subsidy grant. Nevertheless, the projects can stay connected to the grid to supply power.
With around 16 GW of old turbines reaching the end of feed-in-tariff (FiT) support, the government needs to focus on repowering measures and give permits to a greater number of new onshore wind projects to be able to reach the cumulative renewables target of 71 GW by 2030.