Direct Sale Proposal

This post is part of a series discussing a new position paper by German Environment Minister Altmaier and Economy Minister Rösler on reducing cost of the feed-in tariff system.

The third proposal to reduce costs is to make direct marketing obligatory for all installations over 150 kW. And they also want to abolish the “management bonus” (a position shared by the opposition SPD, so this might well be enacted).

This proposal is supposed to reduce costs by a modest 60 million euro (less than 0.4% of 2012 costs), so it won’t do much for the stated goal.

The “management bonus” is now codified in appendix 4 to the Law on Priority of Renewable Energy. It specifies details on compensating renewable energy generators that choose to market their electricity themselves. Basically they get paid the difference between their feed-in tariff and what they are supposed to get on average on the market. And in that context, the “management bonus” is supposed to cover costs of selling the electricity, like for example costs for personnel charged with that task. It is set at values between 1.2 and 0.7 cents per kWh for onshore wind and solar, reduced each year (2012: 1.2, 2013: 1.0, 2014: 0.85, 2015 and beyond 0.7).

The proposal wants to have all installations bigger than 150 kW market their electricity themselves.

This is another big discouragement for smaller projects. That is especially true for the many citizen collectives that have financed small wind power projects in the past. The security that they can always sell their electricity at a fixed price would be gone.

Big developers or the German big 4 utilities won’t have any problem with this. So for this trivial saving of less than 0.4% of cost, the ability of citizens to participate in the renewable energy revolution will be severely restrained.

I am opposed to this proposal. If one wants more direct marketing, do so with a threshold of 50 MW to begin with.

Published by kflenz

Professor at Aoyama Gakuin University, Tokyo. Author of Lenz Blog (since 2003, lenzblog.com).

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