April 3, 2020
Germany

German government defeats plan to abolish fines for wind power projects

By Florence Schulz, translated by Sarah Lawton | 02-04-2020 | www.euractiv.com

The German government has rejected parliament proposals to ease restrictions on the construction of new wind turbines, exposing deep divisions in one of Europe’s pioneering nations for renewable energies. EURACTIV Germany reports.

The expansion of renewable energies risks coming to a standstill in Germany as political parties bicker over laws regulating construction permits for new wind turbines, seen as critical for the country’s energy transition.

A bill presented by the Bundesrat, the upper house of parliament, was intended to simplify the construction of new wind power farms on land, but the bill was rejected by the federal government, which published its response on Monday (30 March).

The Bundesrat’s bill, adopted on 14 February, aimed at suspending penalties for wind turbines that do not meet completion deadlines. According to Germany’s Renewable Energy Sources Act (EEG), wind farm promoters must pay penalties if the project won in a tender is not completed within two years.

The fine applies regardless of the reason for the delay, which are often caused by lawsuits, which tend to affect almost every new project nowadays. When that happens, project sponsors are penalised twice over: on top of the legal costs of the lawsuit, they also lose months of subsidies under the EEG.

The state subsidies are valid for 20 years, but the time runs out at the latest 30 months after the contract is awarded in an auction. However, the legal proceedings usually drag on for years, holding up the construction of new wind turbines.

The draft law, which was submitted by the state of North Rhine-Westphalia in the Bundesrat, aims to abolish the penalties and the 30-month period, arguing they lead to “massive financial uncertainty on the part of bidders” and ultimately hinder the expansion of wind power.

1,300 wind turbines at a standstill

Bureaucratic and legal obstacles have thrown the German wind industry in limbo. Inhibited by the risk of legal action, project developers are turning away from government tenders. Last autumn, only 187.8 MW of the 500 MW put out to tender were awarded, federal statistics show.

A total of about 1,300 wind turbines are currently in a legal limbo: even though they were approved, they haven’t yet been put into operation.

Wind industry representatives had welcomed the Bundesrat’s proposal, and called for a time-limit on potential legal proceedings launched against new wind projects.

The federal government has now rejected the draft on the grounds that it provides an opportunity for project developers to generally avoid the penalties and to adhere even less to the prescribed two-year deadline.

“This is not in the spirit of the invitation to tender, as the penalties serve as a deposit to ensure that the awards are completed within the prescribed period,” the government says in an explanatory note.

At the same time, the government says it is aware of the problem and is currently examining changes to rules related to legal actions and penalties as part of the upcoming revision of the EEG due later this year.

Wind turbines have become a political focal point

The renewables industry in Germany is in disarray. State subsidies under the EEG will start expiring next year, and discussions on a replacement scheme have stalled.

For months the grand coalition has not made any progress on its commitment to remove existing obstacles, a pledge that was also re-affirmed in the country’s climate package presented last year.

At the centre of the debate are plans to limit subsidies for solar plants above a threshold of 52 GW and proposals to impose a minimum distance of 1,000 metres between wind turbines. Both proposals were put forward by the conservative alliance of Christian Democrats (CDU/CSU).

However, according to estimates by the Federal Environment Agency, a flat-rate rule of 1,000 meters would reduce the potential area for new wind farms in Germany by half, making it impossible to reach the country’s goal of bringing renewables to 65% of Germany’s electricity mix by 2030.

The distance regulation for wind turbines has become a political hot potato, as other urgent decisions such as the expansion of offshore wind and the installation of electrolysers for the production of hydrogen are also dependent on a revised EEG.

The Greens in particular are putting pressure to remove the existing obstacles to wind and solar energy and have already submitted two drafts of their own to the Bundesrat.

“If the federal government does not free itself from this hostage negotiation, there will soon be no wind industry in Germany and solar expansion will come to a standstill,” warned Green Party chair Annalena Baerbock. This will not only harm the climate, but also Germany as an industrial location, she added.

Coronavirus delay

Talks at political level were not helped by the coronavirus outbreak, which brought the debate to a standstill. The German energy state secretary (CDU) Andreas Feicht announced in February that the grand coalition would agree on a solution in the same month, but the issue was later postponed during a federal-state summit on 11 March.

20 years after Germany’s flagship renewables law came into force, it now unclear when the EEG will be revised.

In the Bundesrat, the idea of a general distance regulation for wind turbines is seen with scepticism. In its meeting in mid-March, the Federal Council decided to convene a new working group on the subject.

However, the coronavirus outbreak also has a silver lining for the German wind industry. Last week the Federal Network Agency announced that it would temporarily suspend the payment of penalties.

URL to article:  https://www.wind-watch.org/news/2020/04/03/german-government-defeats-plan-to-abolish-fines-for-wind-power-projects/