Can investors trust Germany on distance laws?

On Monday, the ruling coalition of Christian Democrats and Social Democrats agreed to drop the idea of a national 1km distance rule for onshore wind.

Richard Heap
May 20, 2020
Can investors trust Germany on distance laws?

The German wind industry goes to a doctor. It’s been feeling gradually worse over the last couple of years and wants to find out what’s happening.

After a check-up the doctor comes out with the results of the examination.

“I’m afraid I have some bad news. The government has given states the power to opt to use minimum distances of 1km between new wind farms and nearby communities. This could inflame local tensions and do you serious damage.”

“Oh no, that’s terrible,” the industry says. “Is there any good news?”

“Well,” she says. “At least the government’s not doing more damage itself.”

The crisis that has engulfed the German wind industry in the last two years is – like that 'joke' – no laughing matter. So it’s with a sense of bemusement that we have watched the news from Germany about green policies this week.

On Monday, the ruling coalition of Christian Democrats and Social Democrats agreed to drop the idea of a national 1km distance rule for onshore wind. It’s a move that would have caused more devastation for wind businesses in a nation already struggling with the impact of auctions on activity and profit levels.

The government has also committed to a target of 65% renewables in its electricity mix by 2030; and is set to lift a cap on giving subsidies when solar reaches 52GW installed capacity, which is due to happen soon.

The news was welcomed by German wind associations and WindEurope. Giles Dickson, CEO at WindEurope, says that “if the government can now simplify their permitting rules, the massive German wind industry can start supporting jobs and growth again – and helping economic recovery”.

Separately, the government also agreed with coastal states this week to raise the country’s offshore wind target to 20GW by 2030, up 5GW compared to its previous targets. It could have gone further but, after so many steps back for companies in Germany, it’s good to see a few going forwards.

These are bright spots in a country where 38,000 wind jobs have been lost in four years, even before the Covid-19 pandemic. This may help wind companies to better re-gear themselves for a green recovery.

That was the good news.

However, letting individual states opt in to 1km distance rules themselves feels like a heavy blow. It’s the metal weight in the velvet glove!

In good times, this is the sort of policy that would get short shrift from the industry and investors. Companies would be up in arms about giving control of vital infrastructure to local governments. But it now feels like the industry in Germany has faced so much bad news that this feels like a win.

It might well be. But relying on local decisions can go either way.

In the US, individual states have been vital to keep wind growing despite the hostility to wind from the Trump administration.

But, in the UK, the government’s localism agenda of the early 2010s handed planning control to local authorities. This gave opponents more power and ultimately paved the way for a ban on onshore wind subsidies.

We hope Germany goes down the US route – but we can’t be confident it will. Wind investors in Germany are already battling with an onerous planning and permitting system. Why should we trust states to do better on the 1km rule?

Currently, Bavaria is the only German state with a distance rule. This stipulates that wind farms need to be built away from communities, at a distance of ten times the tip height of the turbines used in the project.

But now the government has made the distance law an ‘opt in’ process for all states, and our concern is that this will encourage more states to take a tough line on wind to appease local objectors. The power is now in their hands.

NEWS IN BRIEF

WIND LOSES OUT IN LATEST GERMAN TENDER

Wind has lost out in Germany's latest wind and solar tender run as the Federal Network Agency backed 30 solar projects totalling 204MW. Read more

SIEMENS GAMESA LAUNCHES 14MW TURBINE

Siemens Gamesa has launched a 14MW offshore direct-drive turbine with a 222-metre rotor, which is due to be commercially available in 2024. Read more

AXPO SIGNS 127MW NORWEGIAN PPA DUO

Swiss energy trader Axpo Group has signed two power purchase agreements with the Green Investment Group at the 80MW Buheii and 47MW Tysvaer wind projects in Norway. Both are due to complete in 2021. Read more

IRELAND FAST-TRACKS SEVEN OFFSHORE PROJECTS

The Irish government is fast-tracking the development of seven offshore wind farms, as it seeks 3.5GW installed offshore capacity by 2030. These include projects by Innogy, EDF Renewables and Fred Olsen Renewables. Read more

DENMARK PLANS 4GW ENERGY ISLANDS

The Danish government has set out plans to develop two offshore 'energy islands' totalling 4GW in the North Sea by 2030. Read more

MEXICAN COURT SUSPENDS WIND FREEZE

A court in Mexico has provisionally suspended an official order that would freeze the opening of new wind and solar farms. The judge said the decision by regulator CENACE in April risked distorting free competition. Read more

VATTENFALL PICKS NORDEX FOR 240MW PROJECT

Vattenfall has picked Nordex as turbine supplier for the 240MW South Kyle project in Scotland. The deal includes a 10-year service contract. Read more

AMP BACKS STONEPEAK ON SWANCOR BUYOUT

AMP Capital has completed a $145m mezzanine debt investment with Stonepeak Infrastructure Partners to support the acquisition of Swancor Renewable, which is developing the 376MW Formosa 2 offshore wind farm in Taiwan with Macquarie. Read more

SUZLON WINS DEBT RESTRUCTURE BACKING

Indian manufacturer Suzlon won shareholder support for its €1.4bn debt restructuring plan on Tuesday. Read more

GE SECURES 193MW ORDERS IN TURKEY

Fina Enerji has picked GE Renewable Energy to supply 52 turbines for four wind projects totalling 193MW in Turkey. Read more

The German wind industry goes to a doctor. It’s been feeling gradually worse over the last couple of years and wants to find out what’s happening.

After a check-up the doctor comes out with the results of the examination.

“I’m afraid I have some bad news. The government has given states the power to opt to use minimum distances of 1km between new wind farms and nearby communities. This could inflame local tensions and do you serious damage.”

“Oh no, that’s terrible,” the industry says. “Is there any good news?”

“Well,” she says. “At least the government’s not doing more damage itself.”

The crisis that has engulfed the German wind industry in the last two years is – like that 'joke' – no laughing matter. So it’s with a sense of bemusement that we have watched the news from Germany about green policies this week.

On Monday, the ruling coalition of Christian Democrats and Social Democrats agreed to drop the idea of a national 1km distance rule for onshore wind. It’s a move that would have caused more devastation for wind businesses in a nation already struggling with the impact of auctions on activity and profit levels.

The government has also committed to a target of 65% renewables in its electricity mix by 2030; and is set to lift a cap on giving subsidies when solar reaches 52GW installed capacity, which is due to happen soon.

The news was welcomed by German wind associations and WindEurope. Giles Dickson, CEO at WindEurope, says that “if the government can now simplify their permitting rules, the massive German wind industry can start supporting jobs and growth again – and helping economic recovery”.

Separately, the government also agreed with coastal states this week to raise the country’s offshore wind target to 20GW by 2030, up 5GW compared to its previous targets. It could have gone further but, after so many steps back for companies in Germany, it’s good to see a few going forwards.

These are bright spots in a country where 38,000 wind jobs have been lost in four years, even before the Covid-19 pandemic. This may help wind companies to better re-gear themselves for a green recovery.

That was the good news.

However, letting individual states opt in to 1km distance rules themselves feels like a heavy blow. It’s the metal weight in the velvet glove!

In good times, this is the sort of policy that would get short shrift from the industry and investors. Companies would be up in arms about giving control of vital infrastructure to local governments. But it now feels like the industry in Germany has faced so much bad news that this feels like a win.

It might well be. But relying on local decisions can go either way.

In the US, individual states have been vital to keep wind growing despite the hostility to wind from the Trump administration.

But, in the UK, the government’s localism agenda of the early 2010s handed planning control to local authorities. This gave opponents more power and ultimately paved the way for a ban on onshore wind subsidies.

We hope Germany goes down the US route – but we can’t be confident it will. Wind investors in Germany are already battling with an onerous planning and permitting system. Why should we trust states to do better on the 1km rule?

Currently, Bavaria is the only German state with a distance rule. This stipulates that wind farms need to be built away from communities, at a distance of ten times the tip height of the turbines used in the project.

But now the government has made the distance law an ‘opt in’ process for all states, and our concern is that this will encourage more states to take a tough line on wind to appease local objectors. The power is now in their hands.

NEWS IN BRIEF

WIND LOSES OUT IN LATEST GERMAN TENDER

Wind has lost out in Germany's latest wind and solar tender run as the Federal Network Agency backed 30 solar projects totalling 204MW. Read more

SIEMENS GAMESA LAUNCHES 14MW TURBINE

Siemens Gamesa has launched a 14MW offshore direct-drive turbine with a 222-metre rotor, which is due to be commercially available in 2024. Read more

AXPO SIGNS 127MW NORWEGIAN PPA DUO

Swiss energy trader Axpo Group has signed two power purchase agreements with the Green Investment Group at the 80MW Buheii and 47MW Tysvaer wind projects in Norway. Both are due to complete in 2021. Read more

IRELAND FAST-TRACKS SEVEN OFFSHORE PROJECTS

The Irish government is fast-tracking the development of seven offshore wind farms, as it seeks 3.5GW installed offshore capacity by 2030. These include projects by Innogy, EDF Renewables and Fred Olsen Renewables. Read more

DENMARK PLANS 4GW ENERGY ISLANDS

The Danish government has set out plans to develop two offshore 'energy islands' totalling 4GW in the North Sea by 2030. Read more

MEXICAN COURT SUSPENDS WIND FREEZE

A court in Mexico has provisionally suspended an official order that would freeze the opening of new wind and solar farms. The judge said the decision by regulator CENACE in April risked distorting free competition. Read more

VATTENFALL PICKS NORDEX FOR 240MW PROJECT

Vattenfall has picked Nordex as turbine supplier for the 240MW South Kyle project in Scotland. The deal includes a 10-year service contract. Read more

AMP BACKS STONEPEAK ON SWANCOR BUYOUT

AMP Capital has completed a $145m mezzanine debt investment with Stonepeak Infrastructure Partners to support the acquisition of Swancor Renewable, which is developing the 376MW Formosa 2 offshore wind farm in Taiwan with Macquarie. Read more

SUZLON WINS DEBT RESTRUCTURE BACKING

Indian manufacturer Suzlon won shareholder support for its €1.4bn debt restructuring plan on Tuesday. Read more

GE SECURES 193MW ORDERS IN TURKEY

Fina Enerji has picked GE Renewable Energy to supply 52 turbines for four wind projects totalling 193MW in Turkey. Read more

The German wind industry goes to a doctor. It’s been feeling gradually worse over the last couple of years and wants to find out what’s happening.

After a check-up the doctor comes out with the results of the examination.

“I’m afraid I have some bad news. The government has given states the power to opt to use minimum distances of 1km between new wind farms and nearby communities. This could inflame local tensions and do you serious damage.”

“Oh no, that’s terrible,” the industry says. “Is there any good news?”

“Well,” she says. “At least the government’s not doing more damage itself.”

The crisis that has engulfed the German wind industry in the last two years is – like that 'joke' – no laughing matter. So it’s with a sense of bemusement that we have watched the news from Germany about green policies this week.

On Monday, the ruling coalition of Christian Democrats and Social Democrats agreed to drop the idea of a national 1km distance rule for onshore wind. It’s a move that would have caused more devastation for wind businesses in a nation already struggling with the impact of auctions on activity and profit levels.

The government has also committed to a target of 65% renewables in its electricity mix by 2030; and is set to lift a cap on giving subsidies when solar reaches 52GW installed capacity, which is due to happen soon.

The news was welcomed by German wind associations and WindEurope. Giles Dickson, CEO at WindEurope, says that “if the government can now simplify their permitting rules, the massive German wind industry can start supporting jobs and growth again – and helping economic recovery”.

Separately, the government also agreed with coastal states this week to raise the country’s offshore wind target to 20GW by 2030, up 5GW compared to its previous targets. It could have gone further but, after so many steps back for companies in Germany, it’s good to see a few going forwards.

These are bright spots in a country where 38,000 wind jobs have been lost in four years, even before the Covid-19 pandemic. This may help wind companies to better re-gear themselves for a green recovery.

That was the good news.

However, letting individual states opt in to 1km distance rules themselves feels like a heavy blow. It’s the metal weight in the velvet glove!

In good times, this is the sort of policy that would get short shrift from the industry and investors. Companies would be up in arms about giving control of vital infrastructure to local governments. But it now feels like the industry in Germany has faced so much bad news that this feels like a win.

It might well be. But relying on local decisions can go either way.

In the US, individual states have been vital to keep wind growing despite the hostility to wind from the Trump administration.

But, in the UK, the government’s localism agenda of the early 2010s handed planning control to local authorities. This gave opponents more power and ultimately paved the way for a ban on onshore wind subsidies.

We hope Germany goes down the US route – but we can’t be confident it will. Wind investors in Germany are already battling with an onerous planning and permitting system. Why should we trust states to do better on the 1km rule?

Currently, Bavaria is the only German state with a distance rule. This stipulates that wind farms need to be built away from communities, at a distance of ten times the tip height of the turbines used in the project.

But now the government has made the distance law an ‘opt in’ process for all states, and our concern is that this will encourage more states to take a tough line on wind to appease local objectors. The power is now in their hands.

NEWS IN BRIEF

WIND LOSES OUT IN LATEST GERMAN TENDER

Wind has lost out in Germany's latest wind and solar tender run as the Federal Network Agency backed 30 solar projects totalling 204MW. Read more

SIEMENS GAMESA LAUNCHES 14MW TURBINE

Siemens Gamesa has launched a 14MW offshore direct-drive turbine with a 222-metre rotor, which is due to be commercially available in 2024. Read more

AXPO SIGNS 127MW NORWEGIAN PPA DUO

Swiss energy trader Axpo Group has signed two power purchase agreements with the Green Investment Group at the 80MW Buheii and 47MW Tysvaer wind projects in Norway. Both are due to complete in 2021. Read more

IRELAND FAST-TRACKS SEVEN OFFSHORE PROJECTS

The Irish government is fast-tracking the development of seven offshore wind farms, as it seeks 3.5GW installed offshore capacity by 2030. These include projects by Innogy, EDF Renewables and Fred Olsen Renewables. Read more

DENMARK PLANS 4GW ENERGY ISLANDS

The Danish government has set out plans to develop two offshore 'energy islands' totalling 4GW in the North Sea by 2030. Read more

MEXICAN COURT SUSPENDS WIND FREEZE

A court in Mexico has provisionally suspended an official order that would freeze the opening of new wind and solar farms. The judge said the decision by regulator CENACE in April risked distorting free competition. Read more

VATTENFALL PICKS NORDEX FOR 240MW PROJECT

Vattenfall has picked Nordex as turbine supplier for the 240MW South Kyle project in Scotland. The deal includes a 10-year service contract. Read more

AMP BACKS STONEPEAK ON SWANCOR BUYOUT

AMP Capital has completed a $145m mezzanine debt investment with Stonepeak Infrastructure Partners to support the acquisition of Swancor Renewable, which is developing the 376MW Formosa 2 offshore wind farm in Taiwan with Macquarie. Read more

SUZLON WINS DEBT RESTRUCTURE BACKING

Indian manufacturer Suzlon won shareholder support for its €1.4bn debt restructuring plan on Tuesday. Read more

GE SECURES 193MW ORDERS IN TURKEY

Fina Enerji has picked GE Renewable Energy to supply 52 turbines for four wind projects totalling 193MW in Turkey. Read more

Full archive access is available to members only

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.