“We are heading for a disaster” - Lower Saxony warns of the end of wind power subsidies

Berlin Olaf Lies expects the worst. Lower Saxony's energy and environment minister, together with the consulting firm Windguard, had the experts at his company determine the extent to which wind farms could go offline in the coming years because the subsidies for the systems according to the Renewable Energy Sources Act (EEG) will end. From the point of view of the SPD politician, the results are alarming: "We are heading for a catastrophe," Lies told the Handelsblatt.

Lies now sees the Chancellor's duty: “For the big announced climate protection goals, it is not enough for Chancellor Angela Merkel to meet with Fridays for Future in a publicly effective manner. It must finally give Federal Minister of Economics Peter Altmaier (CDU) a clear mandate to take care of renewable energies more intensively and to prevent the impending slump in wind energy, ”said Lies.

Altmaier himself had recently admitted omissions in climate protection policy. He admits "that we have made mistakes in recent years and acted too late". There is a lot of catching up to do.

The EEG, which came into effect in 2000, guarantees wind turbine operators a fixed payment for 20 years. Throughout Germany, the funding entitlement under the EEG ends at the end of 2020. As many as 4,000 megawatts (MW) of wind turbines are slated to lose the subsidy at that time. This output corresponds to the output of four large coal-fired power plants.

In the years up to 2025 there is a threat of 2300 to 2400 MW being switched off every year. By 2025, as many as 15,000 MW of wind turbines will be at risk. This corresponds to 15 large, conventional power plant blocks. For comparison: Last year, new wind turbines with an output of 1078 MW were installed.

“If the federal government does not act, Germany is facing a gigantic reduction in wind energy with all the consequences of losing CO2-free electricity generation. If we shut down the coal-fired power plants, then we have to ensure the supply of renewable energies, ”said Lies.

Lower Saxony is particularly affected because the state has the largest number of wind turbines in Germany with a clear lead over states such as Brandenburg and Schleswig-Holstein.

Small plants hardly competitive

In Lower Saxony alone, around 3,500 wind turbines with an output of 4,300 MW will reach the end of EEG subsidies by the end of 2025, and thus face an uncertain future.

In principle, the systems can also produce electricity beyond the funding period of 20 years; continued operation for an additional five or even ten years should be technically possible in most cases. The plant operators have the option of selling the electricity.

However, many plant operators will find it difficult to assert themselves in the market. The old, small systems, which require increased maintenance effort towards the end of their useful life, are unlikely to be competitive in view of the current low price level in electricity wholesale.

According to calculations by Windguard, with an electricity price of 3.375 cents per kilowatt hour, only 23 percent of the old systems can be operated economically with a sustainable operation and maintenance strategy. One kilowatt hour of electricity is currently available in the electricity wholesale for less than three cents.

However, there are often very practical hurdles in the way of continued operation. Many network operators have already let the wind farm operators know that they would no longer feed electricity from the systems into their network when the EEG subsidy ended.

The reason for this: From the point of view of some network operators, wind power is a nuisance because its volatility increases the effort required to regulate the network. The network operators argue that the obligation to take up wind power into the network ends with the subsidy.

The wind industry sees it differently. The wind industry is convinced that the feed-in priority for electricity from renewable sources will continue to exist regardless of the EEG subsidies. “This will have to be clarified in court,” says the industry. The uncertainty is great.

Support for the industry comes from Johann Saathoff, energy policy coordinator of the SPD parliamentary group: "We have to ensure that the renewable electricity also has to be consumed and that it has its value," he told the Handelsblatt.

From the point of view of the industry and also of many politicians, continued operation is only the second best solution. They prefer to build new, more efficient plants at the old locations after the subsidy has expired (“repowering”).

In practice, this can mean that ten small wind turbines from the year 2000 are replaced by five new, larger wind turbines, thereby increasing the electricity yield significantly. The industry only gives preference to continuing to operate the old turbines if repowering fails, which will be the case in many cases.

Because anyone who wants to replace old wind turbines with new wind turbines at an existing wind power location will encounter hurdles. This is proven by the investigations carried out by Windguard for the Lower Saxony Ministry of Environment and Energy.

In many cases there are height restrictions for new systems. They often amount to a ban on new construction: systems that could be used to comply with certain height restrictions are no longer available on the market today.

According to surveys by Windguard, there are height restrictions in 608 cases of 1,691 wind turbine locations in Lower Saxony alone with fundamental repowering potential.

In addition, in 20 percent of the 1691 cases examined, air traffic control issues preclude the approval of a new installation. The repowering potential is further reduced by issues of species and immission protection, which in individual cases can lead to problems with a permit.

Minister Lies wants to remove the hurdles for repowering as far as possible. “Modern new and more efficient systems are necessary. Established and often accepted locations must continue to be used as a priority, ”said Lies.

Otherwise, the federal government's claim to increase the share of renewable energies in electricity consumption to 65 percent by 2030 would become impossible, warned Lies.

The industry sees it similarly. The aim must be a modern plant with highly efficient wind turbines, according to the German Wind Energy Association (BWE). Repowering is therefore essential for the success of the energy transition, BWE President Hermann Albers told Handelsblatt.

"We are calling for a national repowering strategy that secures and maintains the urgently needed existing areas and simplifies and accelerates approvals for projects," said Albers.

The planned amendment to the EEG, which the Federal Ministry of Economics is currently working on, offers an opportunity to solve the problems.

However, the Federal Ministry of Economics is not alarmed about the situation. From the end of the EEG subsidy at the turn of the year, “only a very small proportion of the total installed capacity” is initially affected, which is also “well below the annual expansion rates of recent years”.

The ministry refers to the example of photovoltaics. This type of generation will affect plants with an output of only 72 MW from 2021. "Only from 2025 onwards will the first large-scale photovoltaic years be affected." The ministry does not deal with wind power.

In addition, the Federal Ministry of Economics points out that the systems that fall out of EEG funding from 2021 "are refinanced through the 20-year funding". In addition, the ministry points out the possibility of marketing the electricity generated yourself after the subsidy has expired.

It is desirable that as many plant operators as possible use direct marketing. The ministry does not comment on repowering.

The Länder are unlikely to be satisfied with this. At a meeting in June, the minister-presidents demanded that the EEG amendment should also contain regulations that facilitate repowering.

A further determined and efficient expansion of renewable energies is a prerequisite for a successful energy transition and climate protection policy on the way to climate neutrality, according to the minutes of the meeting of the country leaders.

The coalition partner is also pushing. "The minister not only has to admit that he acted too late, he has to deliver quickly now - from an energy, climate and industrial point of view," said SPD energy politician Johann Saathoff.

The draft bill for the EEG amendment is to be presented after the summer break. Details of the schedule are not yet known.

Translation into English assisted using Google Translate

Source: https://amp2.handelsblatt.c...

AUG 22 2020
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