Nothing Wrong With EEG Payments Running Out After 20 Years

The German Law on Priority for Renewable Energy started out 20 years ago. The basic concept was paying a fixed price for renewable energy for 20 years. That price was calculated to make sure people could make a profit over those 20 years.

Now that the first installations under that law are falling out of the scheme, people are calling for some kind of follow-up system. See this Handelsblatt article.

I am not sure that is necessary. The owners of these installations have been paid in full over those 20 years. They got what they were promised.

And since the installations are paid for in full, now their cost of operation is basically zero. There are no fuel costs with renewable energy.

If you can’t find a way to use zero cost energy, I don’t think someone else should pay for that. You can always mine Bitcoin with that zero cost electricity if you don’t find any other idea.

But the really interesting point is that more and more installations will fall into this category over the next decade. There is nothing to stop a solar panel from producing electricity for longer than 20 years.

That in turn means that all those calculations of cost are off by whatever electricity will be produced after the installation is paid off. That doesn’t matter much, with only small amounts of renewable electricity coming from that category. Now.

But that will change, as over the decades, people will find out that more and more electricity comes out of that category.

Solar is already very cheap now. My dream a decade ago, when I was blogging about hydrogen from desert locations, is coming true right now. Kees van der Leun estimates the cost of 1 MWh of green hydrogen as about $20 right now.

That does not include the long term effect of all those hydrogen production solar panels working long after they have been fully paid for.

Published by kflenz

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

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