EU Approves Modified EEG Renewables Scheme Of Germany

• Germany has the green signal from the European Commission to go ahead with the implementation of its EEG 2023 scheme
• The €28 billion program will offer state support in the form of market premiums and FITs
• The country will be able to increase the number and volume of renewable energy tenders, including for solar PV and innovation tenders
• By January 1, 2027, the support will be completely phased out at times of negative prices to prevent overcompensation

Germany has secured clearance from the European Commission for its €28 billion EEG 2023 renewable energy support scheme leading to more competitive tender procedures, with plans to completely phase out the support by January 1, 2027 at times of negative prices to prevent overcompensation.

Erneuerbare Energien Gesetz 2023 or EEG 2023 is designed to enable Germany achieve 80% share of renewables in its total electricity mix by 2030 as it targets climate neutrality by 2045. In clearing it, the commission found the aid proportionate and the scheme necessary and appropriate for the country's grid stability and bring down its GHG emissions.

Under the modified version of the scheme, state support will be offered in the form of market premium by network operator and in case of very small installations, it will be in the form of feed-in-tariffs (FIT). Beneficiaries will be selected through competitive bidding process.

It will enable Germany to increase the number and volume of innovation tenders along with those for onshore wind, biomethane and rooftop as well as ground mounted solar. In the space of rooftop solar, currently Bundesnetzagentur is facing undersubscriptions (see Another Undersubscribed Solar Auction In Germany).

According to the commission, the scheme introduces an 'effective volume control mechanism' for innovation, solar PV and biomethane tenders to adjust the volumes tendered for each and avoid undersubscription.

"The German Renewable Energy Act 2023 scheme will contribute to further decarbonize electricity production by increasing the share of renewable energy. At the same time, it will prevent overcompensating producers by phasing out support at times of negative prices," said EC's Executive Vice-President in charge of competition policy, Margrethe Vestager. "Typically, when demand is lower and prices drop. The scheme also contains safeguards to ensure that competition distortions are kept to the minimum."

Germany was the largest solar market in the European Union (EU) in 2022 with 7.9 GW annual installations, according to SolarPower Europe that expects it to exceed 10 GW in 2023 and reach a cumulative 131 GW by 2026-end (see European Union To Exit 2022 With Over 41 GW Solar Installed).