Germany overhauls its flagship energy policy

(Eco Business, 28 Jun 2016) Germany promises more renewables but big utilities take back control.

Germany is a world leader in renewable energy deployment. Driven by a long-term renewable energy policy that dates back decades and, more recently, a nuclear power phase-out, the country is spearheading a transition to renewables commonly known as the Energiewende (energy transition).

For many years, the policy instrument of choice was a feed-in tariff (FIT). It guaranteed a fixed payment for (in most cases) 20 years and priority grid access for renewables. The policy provided high investment certainty and triggered tremendous growth in renewable power generation capacity.

When the initial law was introduced in 1990, the role of renewables in Germany’s power mix was negligible. By 2015, renewable electricity made up 32 per cent of consumption and had grown at speed exceeding all expectations. The government repeatedly had to upgrade its targets to keep up with renewables growth. But a couple of weeks ago, the German government put forward plans to overhaul the Energiewende’s flagship policy. The planned reform of the Renewable Energy Sources Act includes a switch from feed-in tariffs to auctions.

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Eco Business, 28 Jun 2016: Germany overhauls its flagship energy policy