Germany’s Parliament and Federal Council recently passed a new Renewable Energy Act (Erneuerbare-Energien-Gesetz – “EEG”), which aims to increase the amount of power generated by renewable energy sources to at least 30% by 2020 from the current 14%. This is in line with the German government’s overall commitment to reduce CO2 emissions to 40% below 1990 levels, by 2020. The new EEG will come into force by 1 January 2009. This will be of interest to energy companies, investors and developers both in Germany and abroad.
Pursuant to an announcement made on 6 July, the German transport minister unveiled plans to build 30 new offshore wind farms to meet the country's renewable energy targets, with a total of 2,000 wind turbines being built in the North Sea and the Baltic Sea. This would provide 11,000 MW of electricity, with the first wind farm to be erected off Borkum Island in the North Sea.
Earlier this year, we reported on the key measures set out in the new EEG. The current tariffs for offshore wind stand at 3.5 Euro cents per kWh for 20 years plus the remainder of the year of commissioning. Pursuant to the EEG, the increased tariff for the first 12 years is 13 Euro cents per kWh respectively 15 Euro cents per kWh for wind turbines commissioned prior to 31 December 2015. If the distance of the project to shore is in excess of 12 nautical miles and the water depth exceeds 20 metres, the 12 –year period will be extended by 0.5 months for each additional nautical mile and by 1.7 months for each full metre exceeding 20 metres.
As reported previously, following the expiry of the 12-year period (as may be extended), electricity generated from offshore wind farms would continue to attract a guaranteed feed-in tariff of 3.5 Euro cents per kWh for a further 8-year period but developers will be authorised to profit from higher market tariffs by opting out of the EEG-tariffs and selling the electricity on the market. The right to exercise such option is subject to certain conditions and can only be exercised for full months.
The passing of the EEG coincides with various EU-wide initiatives aiming to boost investment into offshore wind, not least the UK government’s announcement of intending to spend £100 billion (US$200 billion) on renewables projects in the forthcoming 12 years, with offshore wind expected to take the central role in this. The UK government, via the Crown Estate, also launched Round 3 of its offshore wind-licensing programme on 4 June 2008, which aims to deliver up to 25GW of additional offshore wind energy generation capacity in the UK by 2020.
To access our previous Law-Now on Offshore Wind Opportunities in Germany, please click here.
To access out previous Law-Now on the Crown Estate launching round 3 of offshore wind farm development, please click here.
To access our previous Law-Now on the UK government’s renewable strategy, please click here.
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