Renewable Energy Act (EEG) amendment endangers value creation and employment in the offshore wind energy industry

Berlin, July 8, 2016. The offshore sector criticises the planned reduction in annual development of offshore wind power after 2020 as part of the most recent Renewable Energy Act (EEG) amendment. Contrary to the original plans, only 500 MW (previously 730 MW) in the years 2021 and 2022 and a mere 700 MW annually from 2023 to 2025 will be tendered. This corresponds to an effective reduction of almost one third (31.5%) compared to the originally agreed expansion in the years 2021-2022.

Industry associations and organisations suggest that “a reduced volume of development not only jeopardizes national and international climate goals, but would also have a fatal impact on value creation and employment. It is equivalent to a thread breakage. At the National Maritime Conference in Bremerhaven in October 2015, the German Chancellor Angela Merkel said that she was determined to prevent this major disruption. The minister-presidents of the German states and the Chancellor also agreed on this in their discussion about the Renewable Energy Act in June 2016.

Industry representatives emphasised that “effective cost reductions are only possible with continuous expansion and a sufficient expansion volume”. The current tender results of the Dutch offshore wind farms Borssele 1 and 2, which are scheduled to go online with a capacity of 700 MW in 2020, already show a clear reduction in costs. In contrast to Germany, the comparatively small country of the Netherlands is inviting tenders for an annual capacity of 700 MW of offshore wind energy. Already in January 2016, the German offshore wind energy sector and coastal states called for a yearly capacity expansion of 900 MW after 2020 in their “Wismarer Appell”.

A positive signal according to the sector is the fact that the realisation of demo and pilot plants will be possible even before 2020.

The organisations further declared that “procedures aiming at better network utilisation and technical innovations should be used to overcome short-term grid constraints”. For example, a recent study by Fichtner GmbH and the law firm GGSC shows that grid constraints – which currently make the transport of offshore wind power to the shore more difficult in critical situations – can be overcome in the short term with improved network utilisation using “dynamic real-time processes” until sufficient network and grid capacity is available again. Furthermore, the increased use of hybrid lines, high-temperature conductors and temperature monitoring is recommended. In principle, today’s technical possibilities for better network utilisation of existing grids (Online-DSA, Dynamic Security Assessment) should be quickly implemented within the current infrastructure. According to the organisations, “the proposals should be implemented promptly by the Federal Network Agency and transmission grid operators. Many of these measures were already demonstrated many years ago in numerous analyses and expert opinions, such as the DENA I and DENA II grid studies.”

The sector also believes that the Renewable Energy Act amendment will endanger the international importance of the German offshore wind energy industry: “Germany is second in offshore wind energy expansion worldwide and is a leader in offshore technology development. The Renewable Energy Act amendment endangers Germany’s pioneering role in global climate protection and technical innovations.” If the federal government champions the international implementation of the Paris resolution but puts on the brakes at the national level, it will send mixed signals.

Until 2014, the federal government's expansion targets for offshore wind in German waters stood at 25 GW by 2030. Now, only 15 GW is planned.

The industry currently employs around 20,000 people in Germany, and more than 10 billion Euros has already been invested.

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