On January 1, 2021 the amended Renewable Energies Act (EEG 2021) came into force. With the amendment to the EEG, the German government aims to further promote the expansion of renewable energies. For the first time, the goal of greenhouse gas neutrality for electricity supply before the year 2050 is enshrined in law. The amendment contains a whole bundle of individual measures – from the possibility of financial participation by municipalities in the expansion of onshore wind energy, to facilitation of self-supply, to regulation of the smart meter gateway obligation.
It is already foreseeable that there will be readjustments to the EEG 2021 in the course of this year. In the resolution proposal of the government factions of December 15, 2020, it was stated, among other things, that in the first quarter of 2021, a more far-reaching expansion path for renewable energies is to be defined that sufficiently takes into account the European climate target of 55% by 2030. The further strengthening of long-term Power Purchase Agreements (PPAs) is also reserved for a future amendment to the EEG.
Follow-up support for existing plants
At the last minute, the government factions were able to agree on a follow-up regulation for the subsidization of existing wind turbines in Section 23b EEG 2021. Supported turbines with an installed capacity of up to 100 kW that are not onshore wind turbines will continue to receive a fixed feed-in tariff, with the respective annual market value to be used as the basis for the amount of the entitlement. In the case of de-subsidized onshore wind turbines for which the original entitlement to payment under the version of the EEG applicable to the installation has ended on December 31, 2020 or December 31, 2021, the Federal Network Agency shall determine the persons entitled to the feed-in tariff and the value to be applied for the amount of the entitlement by means of auctions. In the case of subsidized onshore wind turbines whose subsidy ends on December 31, 2020, the value to be applied in 2021 in the months in which no award in a auction is effective shall be the monthly market value for onshore wind energy, plus 1.0 cent per kilowatt hour for electricity generated before July 1, 2021, 0.5 cents per kilowatt-hour for electricity generated after June 30, 2021 and before October 1, 2021, and 0.25 cents per kilowatt-hour for electricity generated after September 30, 2021 and before January 1, 2022.
Volumes of auction for onshore wind energy
With the adjustment of the volumes of auction for onshore wind turbines comes another significant change in Section 28 (6) EEG 2021. According to this provision, the Federal Network Agency must reduce the volume of a wind power auction if it is expected that the volume of auction will be greater than the submitted bid volume (imminent undersigning). This subsequent shortage of the auction volume is also called “endogenous rationing” and could lead to a downward spiral in the supply of wind power, as the exact quantity awarded is uncertain due to the shortage possibility described above.
Separation of bidding procedures for ground-mounted and rooftop photovoltaic systems.
Another significant change lies in the future separation of the auction procedures of ground-mounted photovoltaic installations (solar installations of the first segment) and rooftop installations (solar installations of the second segment) by Section 28a EEG 2021. The maximum installation bid size for ground-mounted installations will be increased to 20 MW. Rooftop photovoltaic installations with an installed capacity of 300 and 750 kW are given the option by the EEG Amendment 2021 to either participate in auctions or to claim a fixed tariff and consume part of their electricity themselves, Section 22 (3) Sentence 2, (6) Sentence 2 EEG 2021 and Section 48 (5) EEG 2021. However, this fixed tariff is only granted for 50% of the electricity generated. Participation in auctions for rooftop photovoltaic installations is only mandatory from an installed capacity of at least 750 kW.
EEG levy exemption for photovoltaic roof installations up to 30 kW
The EEG amendment also brings changes for rooftop photovoltaic installations that receive feed-in tariffs. For example, Section 61b (2) EEG 2021 completely exempts solar installations with an installed capacity of now up to 30 kW in the amount of 30 MWh from the EEG apportionment. There are also moderate changes to the so-called breathing cap.
Financial participation opportunity for municipalities
In order to maintain and further promote the acceptance of the expansion of renewable energies, the EEG amendment provides for a voluntary financial participation of municipalities in the revenues of wind farms in the newly introduced § 36k EEG 2021. Operators of onshore wind farms that have received an award for their facility may offer the municipalities affected by the facility amounts totaling 0.2 cents per kilowatt hour for the actual amount of electricity fed into the grid and for the notional amount of electricity according to number 7.2 of Annex 2 EEG 2021. The group of affected municipalities is clearly defined in that municipalities whose municipal area is not within 2.5 km of the plant are not considered to be affected. In addition, it is clarified that agreements between the municipality and the plant operator are already possible before the BImSchG (Federal Immission Control Act) permit is issued and are not considered an advantage in the sense of §§ 331-334 StGB (Criminal Code) (§ 36k (2) EEG 2021). The operators are reimbursed for the payments by the grid operator (§ 36k (3) EEG 2021).
Measures to improve tenant electricity subsidies
There are also changes in the area of tenant electricity. For example, Section 21 (3) Sentence 1 Number 1 EEG 2021 implements the so-called neighborhood approach. The entitlement to payment of the tenant electricity surcharge pursuant to Section 19 (1) number 3 EEG 2021 now exists if the end consumer of the so-called tenant electricity is located in the same neighborhood in which the building equipped with the solar system is located. Furthermore, Section 24 (1) sentence 4 EEG 2021 modifies the regulation on the aggregation of solar installations. Solar installations that are not operated at the same connection point are not aggregated for the purpose of determining the entitlement to a tenant electricity surcharge.
Introduction of the Smart-Meter-Obligation
The so-called Smart-Meter-Obligation was also established by law. According to the revised Section 9 (1) EEG 2021, plants with an installed capacity of more than 25 kW must have technical equipment with which the actual feed-in can be retrieved at any time via a smart-meter-gateway and the stepless or stepped control of the feed-in capacity can be ensured. Plants with an installed capacity of more than 7 kW up to and including 25 kW must have technical devices with which the actual feed-in can be retrieved at any time via a smart-meter-gateway, Section 9 (1a) EEG 2021 Both requirements apply in each case from the market declaration of the BSI. For existing plants commissioned before 2021 (§ 100 (1) EEG 2021), the above obligations apply as soon as they are actually equipped with a smart-metering-system, cf. § 100 (4), 4a EEG 2021.
Innovation support in the EEG 2021
Alterations were also decided in the area of innovation auctions by including, among others, agri-photovoltaic installations and floating photovoltaic installations as well as parking lot photovoltaic installations in the innovation auctions.
The amendment to the Renewable Energy Sources Act continues to include a provision to promote the production of hydrogen. According to the newly introduced § 69b EEG 2021, no EEG surcharge must be paid on the electricity consumed to produce green hydrogen, regardless of the intended use of the hydrogen produced. In the case of an electricity-cost-intensive company, where the electrochemical production of hydrogen makes the largest contribution to the company’s total value added, a limitation of the EEG surcharge will also be applied, irrespective of the intended use of the hydrogen produced, upon application by the company in accordance with Section 64a EEG 2021. However, this is subject to the company proving that it operates a certified energy or environmental management system or, in the case of small companies, an alternative system for improving energy efficiency.
Settlement solution for capacity lease agreements
For so-called capacity lease agreements, Section 104 (5) EEG 2021 also standardizes a claim against the transmission system operator for the conclusion of a settlement to resolve a dispute regarding the prerequisites for the existence of a right to refuse performance pursuant to Section 104 (4) EEG, insofar as no legally binding court decision has yet been issued in this regard. The background for this regulation is the already rolling wave of lawsuits filed by the transmission system operators against the parties to utilization contracts for power plant capacities. Under pressure from the Federal Network Agency, the transmission system operators are now disputing the conditions for claiming the self-generation privilege in many cases, and in some cases lawsuits are already pending. In terms of content, the settlement must regulate that no EEG surcharge must be paid for disputed electricity quantities in accordance with a notification pursuant to Section 104 (4) Sentence 1 No. 1 EEG, but for electricity quantities generated after December 31, 2020 and purchased by the disc tenant. The claim for conclusion of the settlement must be asserted by June 30, 2022.
More far-reaching demands in resolution for future EEG amendment
The Federal Ministry for Economic Affairs and Energy has already announced the next amendment. In the resolution proposal tabled by the government factions, the German government is called upon to develop a concept for gradually reducing the EEG surcharge by means of an alternative, budget-neutral financing model. Furthermore, a more far-reaching expansion path for renewable energies is to be defined in the first quarter of 2021 that ensures compatibility with the European climate targets. The instrument of innovation auctions is to be comprehensively developed further (including across countries and sectors, storage, flexibilization) and expanded in line with the expansion paths. Further improvements are also to be made in connection with the design of accelerated planning and approval of projects, particularly with a view to repowering, for example by including repowering as a principle of regional planning in Section 2 of the ROG (Regional Development Act) or by creating improved framework conditions for change approvals under the Immission Control Act. In the course of a possible increase in expansion quantities, a future amendment to the law should also provide for a further lowering of the four-hour rule in the case of negative prices. A central demand of the resolution is to take into account in the further planning of the expansion of renewable energies that business models without EEG support through PPAs will make a central contribution to the energy transition. To improve the framework conditions for PPAs, the German government is called upon to examine various instruments, such as low-interest (KfW) loans, purchase guarantees in the event of the electricity purchaser’s insolvency, electricity price compensation also for PPA consumption for industrial consumers, and tax incentives. The resolution also calls for the development of further opportunities for municipal participation as well as a continued regulation on citizen energy. The adjustment of the trade tax apportionment, according to which 90% of the trade tax is incurred by the municipality where a plant is located and only 10% by the municipality where the operating company has its registered office, is also to be reserved for a further amendment to the EEG. The German government is also called upon to submit a regulatory proposal without delay, according to which housing companies do not lose the extended reduction in trade tax if, among other things, they generate and sell tenant electricity via solar plants on their buildings. Last but not least, it is to be examined to what extent models for the inclusion of energy service providers and energy pools are possible for the own electricity privilege.
So it remains exciting.
(7 January 2021)