Germans take to streets as green subsidies cut

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Richard Heap
June 13, 2016
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This content is from our archive. Some formatting or links may be broken.
Germans take to streets as green subsidies cut

No doubt there were football fans across Europe who spent most of this weekend watching the first matches of Euro 2016.

But, in Germany, it is not just football that is getting people out on the streets. This month, thousands of protestors marched through Berlin to protest against changes to the nation’s Renewable Energies Act, which they said puts the nation’s transition towards green power at risk. On Wednesday, the German government approved reforms to the act, after the central government agreed the new rules with 16 states last week.

The Renewable Energies Act has been a key piece of legislation in supporting the growth of the country’s wind sector, and making Germany arguably the world’s most wind-friendly nation.

Germany ranks third globally in terms of total installed capacity (44.9GW at the end of 2015), third in terms of installations in 2015 (6GW), and third in terms of wind capacity per capita. Whichever way you cut it, Germany is strong on those three key measures.

But the future of wind investment in Germany is less clear-cut.

The government, led by Angela Merkel, has approved rules to limit annual installed capacity to 2.8GW each year for the next three years; and is introducing an auction-based feed-in tariffs system at the start of 2017 to help drive down costs. These two rules mean that it is set to be more difficult for investors to get permission for their schemes, and reduces returns when projects are built.

Meanwhile, the German government has maintained a target of 15GW total offshore wind capacity by 2030, and is planning annual auctions of 730MW capacity from 2021. This is not as generous as the 900MW capacity a year that the industry had been looking for, but does at least give investors a clear plan for the future.

If we are looking for good points in these rules, certainty is one.

But let’s not get carried away and say the industry should welcome these rules on that basis. The fact is that a historically wind-friendly government is enforcing rules that are set to result in slower growth and lower returns for wind businesses. It is a bitter pill. And we know that such rules can also point the way for worse to come.

Angela Merkel is in a tough position when it comes to renewable energy as she is being assailed by both sides.

Environmentalists are angry that Merkel and her government are moving away from their high-profile commitments to wind and other green energy sources, while energy-intensive businesses are angry that the rules do not go far enough to drive down costs. With both sides angry we can assume the balance of the new rules is about right and that, in that case, there is little to suggest Merkel will make major additional changes.

But there is also the prospect of Germany’s next federal election in October 2017, which gives cause for concern in the wind sector.

The country’s pro-wind policies have been led by Merkel and her government. She has been in place since 2005, which has brought continuity, but in a poll last month just under two-thirds of people said they wanted to get rid of Merkel and her ruling conservatives at the next election. This could spell disaster for renewables.

We have seen the devastating impact of political changes on flourishing wind markets in Europe, including Spain and Poland. Germany is not immune from similar shifts. It may be Europe’s wind champion for now, but all things must come to an end.

No doubt there were football fans across Europe who spent most of this weekend watching the first matches of Euro 2016.

But, in Germany, it is not just football that is getting people out on the streets. This month, thousands of protestors marched through Berlin to protest against changes to the nation’s Renewable Energies Act, which they said puts the nation’s transition towards green power at risk. On Wednesday, the German government approved reforms to the act, after the central government agreed the new rules with 16 states last week.

The Renewable Energies Act has been a key piece of legislation in supporting the growth of the country’s wind sector, and making Germany arguably the world’s most wind-friendly nation.

Germany ranks third globally in terms of total installed capacity (44.9GW at the end of 2015), third in terms of installations in 2015 (6GW), and third in terms of wind capacity per capita. Whichever way you cut it, Germany is strong on those three key measures.

But the future of wind investment in Germany is less clear-cut.

The government, led by Angela Merkel, has approved rules to limit annual installed capacity to 2.8GW each year for the next three years; and is introducing an auction-based feed-in tariffs system at the start of 2017 to help drive down costs. These two rules mean that it is set to be more difficult for investors to get permission for their schemes, and reduces returns when projects are built.

Meanwhile, the German government has maintained a target of 15GW total offshore wind capacity by 2030, and is planning annual auctions of 730MW capacity from 2021. This is not as generous as the 900MW capacity a year that the industry had been looking for, but does at least give investors a clear plan for the future.

If we are looking for good points in these rules, certainty is one.

But let’s not get carried away and say the industry should welcome these rules on that basis. The fact is that a historically wind-friendly government is enforcing rules that are set to result in slower growth and lower returns for wind businesses. It is a bitter pill. And we know that such rules can also point the way for worse to come.

Angela Merkel is in a tough position when it comes to renewable energy as she is being assailed by both sides.

Environmentalists are angry that Merkel and her government are moving away from their high-profile commitments to wind and other green energy sources, while energy-intensive businesses are angry that the rules do not go far enough to drive down costs. With both sides angry we can assume the balance of the new rules is about right and that, in that case, there is little to suggest Merkel will make major additional changes.

But there is also the prospect of Germany’s next federal election in October 2017, which gives cause for concern in the wind sector.

The country’s pro-wind policies have been led by Merkel and her government. She has been in place since 2005, which has brought continuity, but in a poll last month just under two-thirds of people said they wanted to get rid of Merkel and her ruling conservatives at the next election. This could spell disaster for renewables.

We have seen the devastating impact of political changes on flourishing wind markets in Europe, including Spain and Poland. Germany is not immune from similar shifts. It may be Europe’s wind champion for now, but all things must come to an end.

No doubt there were football fans across Europe who spent most of this weekend watching the first matches of Euro 2016.

But, in Germany, it is not just football that is getting people out on the streets. This month, thousands of protestors marched through Berlin to protest against changes to the nation’s Renewable Energies Act, which they said puts the nation’s transition towards green power at risk. On Wednesday, the German government approved reforms to the act, after the central government agreed the new rules with 16 states last week.

The Renewable Energies Act has been a key piece of legislation in supporting the growth of the country’s wind sector, and making Germany arguably the world’s most wind-friendly nation.

Germany ranks third globally in terms of total installed capacity (44.9GW at the end of 2015), third in terms of installations in 2015 (6GW), and third in terms of wind capacity per capita. Whichever way you cut it, Germany is strong on those three key measures.

But the future of wind investment in Germany is less clear-cut.

The government, led by Angela Merkel, has approved rules to limit annual installed capacity to 2.8GW each year for the next three years; and is introducing an auction-based feed-in tariffs system at the start of 2017 to help drive down costs. These two rules mean that it is set to be more difficult for investors to get permission for their schemes, and reduces returns when projects are built.

Meanwhile, the German government has maintained a target of 15GW total offshore wind capacity by 2030, and is planning annual auctions of 730MW capacity from 2021. This is not as generous as the 900MW capacity a year that the industry had been looking for, but does at least give investors a clear plan for the future.

If we are looking for good points in these rules, certainty is one.

But let’s not get carried away and say the industry should welcome these rules on that basis. The fact is that a historically wind-friendly government is enforcing rules that are set to result in slower growth and lower returns for wind businesses. It is a bitter pill. And we know that such rules can also point the way for worse to come.

Angela Merkel is in a tough position when it comes to renewable energy as she is being assailed by both sides.

Environmentalists are angry that Merkel and her government are moving away from their high-profile commitments to wind and other green energy sources, while energy-intensive businesses are angry that the rules do not go far enough to drive down costs. With both sides angry we can assume the balance of the new rules is about right and that, in that case, there is little to suggest Merkel will make major additional changes.

But there is also the prospect of Germany’s next federal election in October 2017, which gives cause for concern in the wind sector.

The country’s pro-wind policies have been led by Merkel and her government. She has been in place since 2005, which has brought continuity, but in a poll last month just under two-thirds of people said they wanted to get rid of Merkel and her ruling conservatives at the next election. This could spell disaster for renewables.

We have seen the devastating impact of political changes on flourishing wind markets in Europe, including Spain and Poland. Germany is not immune from similar shifts. It may be Europe’s wind champion for now, but all things must come to an end.

No doubt there were football fans across Europe who spent most of this weekend watching the first matches of Euro 2016.

But, in Germany, it is not just football that is getting people out on the streets. This month, thousands of protestors marched through Berlin to protest against changes to the nation’s Renewable Energies Act, which they said puts the nation’s transition towards green power at risk. On Wednesday, the German government approved reforms to the act, after the central government agreed the new rules with 16 states last week.

The Renewable Energies Act has been a key piece of legislation in supporting the growth of the country’s wind sector, and making Germany arguably the world’s most wind-friendly nation.

Germany ranks third globally in terms of total installed capacity (44.9GW at the end of 2015), third in terms of installations in 2015 (6GW), and third in terms of wind capacity per capita. Whichever way you cut it, Germany is strong on those three key measures.

But the future of wind investment in Germany is less clear-cut.

The government, led by Angela Merkel, has approved rules to limit annual installed capacity to 2.8GW each year for the next three years; and is introducing an auction-based feed-in tariffs system at the start of 2017 to help drive down costs. These two rules mean that it is set to be more difficult for investors to get permission for their schemes, and reduces returns when projects are built.

Meanwhile, the German government has maintained a target of 15GW total offshore wind capacity by 2030, and is planning annual auctions of 730MW capacity from 2021. This is not as generous as the 900MW capacity a year that the industry had been looking for, but does at least give investors a clear plan for the future.

If we are looking for good points in these rules, certainty is one.

But let’s not get carried away and say the industry should welcome these rules on that basis. The fact is that a historically wind-friendly government is enforcing rules that are set to result in slower growth and lower returns for wind businesses. It is a bitter pill. And we know that such rules can also point the way for worse to come.

Angela Merkel is in a tough position when it comes to renewable energy as she is being assailed by both sides.

Environmentalists are angry that Merkel and her government are moving away from their high-profile commitments to wind and other green energy sources, while energy-intensive businesses are angry that the rules do not go far enough to drive down costs. With both sides angry we can assume the balance of the new rules is about right and that, in that case, there is little to suggest Merkel will make major additional changes.

But there is also the prospect of Germany’s next federal election in October 2017, which gives cause for concern in the wind sector.

The country’s pro-wind policies have been led by Merkel and her government. She has been in place since 2005, which has brought continuity, but in a poll last month just under two-thirds of people said they wanted to get rid of Merkel and her ruling conservatives at the next election. This could spell disaster for renewables.

We have seen the devastating impact of political changes on flourishing wind markets in Europe, including Spain and Poland. Germany is not immune from similar shifts. It may be Europe’s wind champion for now, but all things must come to an end.

No doubt there were football fans across Europe who spent most of this weekend watching the first matches of Euro 2016.

But, in Germany, it is not just football that is getting people out on the streets. This month, thousands of protestors marched through Berlin to protest against changes to the nation’s Renewable Energies Act, which they said puts the nation’s transition towards green power at risk. On Wednesday, the German government approved reforms to the act, after the central government agreed the new rules with 16 states last week.

The Renewable Energies Act has been a key piece of legislation in supporting the growth of the country’s wind sector, and making Germany arguably the world’s most wind-friendly nation.

Germany ranks third globally in terms of total installed capacity (44.9GW at the end of 2015), third in terms of installations in 2015 (6GW), and third in terms of wind capacity per capita. Whichever way you cut it, Germany is strong on those three key measures.

But the future of wind investment in Germany is less clear-cut.

The government, led by Angela Merkel, has approved rules to limit annual installed capacity to 2.8GW each year for the next three years; and is introducing an auction-based feed-in tariffs system at the start of 2017 to help drive down costs. These two rules mean that it is set to be more difficult for investors to get permission for their schemes, and reduces returns when projects are built.

Meanwhile, the German government has maintained a target of 15GW total offshore wind capacity by 2030, and is planning annual auctions of 730MW capacity from 2021. This is not as generous as the 900MW capacity a year that the industry had been looking for, but does at least give investors a clear plan for the future.

If we are looking for good points in these rules, certainty is one.

But let’s not get carried away and say the industry should welcome these rules on that basis. The fact is that a historically wind-friendly government is enforcing rules that are set to result in slower growth and lower returns for wind businesses. It is a bitter pill. And we know that such rules can also point the way for worse to come.

Angela Merkel is in a tough position when it comes to renewable energy as she is being assailed by both sides.

Environmentalists are angry that Merkel and her government are moving away from their high-profile commitments to wind and other green energy sources, while energy-intensive businesses are angry that the rules do not go far enough to drive down costs. With both sides angry we can assume the balance of the new rules is about right and that, in that case, there is little to suggest Merkel will make major additional changes.

But there is also the prospect of Germany’s next federal election in October 2017, which gives cause for concern in the wind sector.

The country’s pro-wind policies have been led by Merkel and her government. She has been in place since 2005, which has brought continuity, but in a poll last month just under two-thirds of people said they wanted to get rid of Merkel and her ruling conservatives at the next election. This could spell disaster for renewables.

We have seen the devastating impact of political changes on flourishing wind markets in Europe, including Spain and Poland. Germany is not immune from similar shifts. It may be Europe’s wind champion for now, but all things must come to an end.

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Not a member yet?

Become a member of the 6,500-strong A Word About Wind community today, and gain access to our premium content, exclusive lead generation and investment opportunities.