EEG at 20: the pros and cons7 July 2020
20 years after Germany’s landmark renewable energy law (EEG), both admirers and critics weighed in on the law’s impact, Clean Energy Wire reports.
The law launched on 1 April 2000 was “a good start” but it’s time for “EEG 4.0” to jump-start the further expansion of renewable power argued climate economist Claudia Kemfert in an opinion piece for Handelsblatt Online. Kemfert, of the German Institute for Economic Research (DIW), called the law a remarkable success, arguing that it drove down the price of renewable energy and pointing out that renewables now supply more than 40% of the country’s electricity. But, Kemfert notes, the renewables expansion has run into political obstacles. The government must resolve disputes blocking the expansion of wind and solar power, she says, and adopt new policies to better integrate renewable energy into the grid, including better grid controls, energy storage and new digital technologies.
Former German environment minister Jurgen Trittin, who was in office when the law first went into effect, went further, accusing the current government of undermining the EEG’s success by blocking the expansion of renewables, newswire dpa reported. “Just at the time when the investments of the last few years are paying off, when it is worthwhile to use your own electricity from the roof yourself because it is cheaper than from the public utilities, the federal government is stepping on the expansion brake,” Trittin, of the Green Party, told dpa. “This brake on expansion has fatal consequences for jobs, consumers and the climate.”
Meanwhile, the Frankfurter Allgemeine Zeitung (FAZ) had a more mixed take on the law. “The EEG was, basically speaking, effective, but not economically efficient,” Karen Pittel, energy economist at the Munich Ifo Institute told FAZ. That is basically the consensus among economists, wrote Niklas Zaboji in FAZ. “In terms of boosting the expansion of renewables, there have been positive effects. But the price for this has been high,” Zaboji argued.
Utility groups, renewable industry trade bodies, and environmentalists issued statements hailing the EEG as a major success story, but said the government must remove obstacles to the further expansion of renewables, in particular by lifting the cap on solar power generation and finding some solution to get onshore wind power growth on track again. “A roadmap for the expansion of renewables is overdue and also has the potential to become an economic driver in the emerging economic crisis,” wrote Simone Peter of the German Renewable Energy Federation (BEE) in an opinion piece for Frankfurter Rundschau.
Both the utilities association BDEW and Friends of the Earth Germany (BUND) also called on the government to include renewables in any response to Covid-19. “The planned billion-euro economic stimulus packages must focus on the resilient and sustainable orientation of the economy. This includes, in particular, a nature-compatible energy supply,” said BUND chairman Olaf Bandt. Kerstin Andreae of BDEW echoed that point: “Particularly against the background of the emerging economic crisis, it must be ensured that investments continue to be made in the expansion of renewable energies and that they can guarantee the energy supply of tomorrow,” Andreae said.
A positive perspective from Weltec Biopower, a German biogas pioneer that has benefitted from the EEG
The introduction of the German Renewable Energies Act (EEG) on 1 April 2000 marked the start of the expansion of renewable energy in Germany. The law postulates two fundamental principles: first, in the grid, power from renewable sources is given priority over conventional power; second, the feed-in tariffs set out in legislation for the supply of power from renewables establishes investment security for market players.
The developments of the past 20 years confirm the success of the EEG. Since the law went into force, the share of renewable energy in the Germany’s gross power consumption has continually increased, from 6.2% in 2000 to 42.1% in 2019. Some 244 billion kWh is generated annually from solar energy, wind, water and biomass, with the latter accounting for 11% of the figure. In the heat production sector, renewables account for about 39%, with 34% derived from bioenergy.
“In Germany, renewable energy is power source number one, and the whole world has come to view the EEG as an effective instrument for the systematic expansion of renewables“, believes Jens Albartus, director of Weltec Biopower. “Moreover, the law and its adaptations to new market conditions have constantly brought about new technologies that have become an indispensable element of many profitable energy plants.“
Since it was founded, back in 2001, biogas pioneer Weltec has made considerable progress, including as an exporter, over
the years designing and installing more than 300 plants in 25 countries on five continents, and investing more than €100 million in its own biogas plants throughout Germany.
“To perpetuate the success story,” says Jens Albartus, “we must now increasingly turn our attention to the existing anaerobic digestion plants in Germany and urgently find smart follow-up solutions, especially for those whose 20-year EEG subsidy will end in the coming years.“ The effort should be worth it, he points out, as biogas has an important role to play in the renewable energy mix and also, as biomethane (ie, refined biogas) in the decarbonisation of transport.