Monopolies Commission recommendation threatens German wind

GERMANY: Germany's Monopoly Commission has recommended renewables support should come in the form of a competitive and technology-neutral quota system.

A newly-released commission document states that "a quota model automatically supports the cheapest form of renewable energies because electricity suppliers would buy this power".

Greenpeace reponded this would affect offshore. It said: "In Germany, this would mean onshore wind energy.... A quota system would put an end to development of currently more expensive, but in future important technologies, such as offshore wind."

Hermann Falk,  managing director of the German renewables federation BEE (Bundesverband Erneuerbare Energie) said: "As the Monopoly Commission itself confirms, Germany's feed-in tariff renewables support mechanism has opened up the electricity market, which was previously dominated by just a few large energy companies.

"Today, millions of people in Germany either own plants that generate electricity or have shares in such plants. This is unknown in countries that have quota systems."

Lack of competition

The Commission complained about the lack of competitive elements in Germany's arrangement of switching increasingly to renewables, recommending the introduction of a support mechanism based on the Swedish green-certificate system or, "if there are political reasons in favour" — largely depending on which political parties form the new federal government after elections on 22 September — developing the existing "market premium" mechanism.

However, the Swedish Energy Agency's Electricity Certificate Report 2012 report revealed that the renewables-certificate trading system has created an uncertain investment climate. Continued expansion of renewable-electricity production has resulted in big certificate surpluses. But the quota obligation up to 2012 did not provide sufficient demand to take up all the available certificates. The system also favours large generators because they are less dependent on the sale of certificates to keep their plants running and so can wait for a better prices before they sell, the report said. In contrast, small producers are dependent on a steady sale of their certificates to assure revenue flows and thus maintain production.

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