- Germany’s juwi has demanded the government to amend the EEG Act to include 12-month extension for solar and wind project implementation
- It attributes supply chain disruption and material bottlenecks especially for network components to demand the same
- Management says manufacturers are unable to guarantee delivery dates due to the situation in Ukraine and material shortages
- If project timelines in such a situation are not extended, it may lead to renewable energy projects being fined for missing completion deadline
Renewable energy developer juwi AG has called upon the German government to extend deadlines for the implementation of solar and wind power projects by an additional 12 months under the country’s Renewable Energy Sources Act (EEG) citing supply chain disruptions.
According to juwi, currently under EEG for solar PV projects, the timeline for project completion is 18 months and that for onshore wind facilities it is 24 months. Beyond these deadlines, the remuneration under EEG comes down.
However, there is a strong probability for project completion delay due to an existing 2-year timeline for delivery of network components as substations, transformers, substations & transfer stations which is now further threatened by disrupted supply chain and material bottlenecks.
“As a result, renewable energy projects not only run the risk of being fined for not being implemented on time through no fault of their own and of losing their bids, the goals of the federal government are also out of reach,” warns juwi.
“We are currently experiencing that many manufacturers can no longer contractually guarantee delivery dates due to the tense situation in Ukraine and the current material shortages,” said juwi CEO Christian Arnold. “Therefore, there is a very clear risk that projects will not be implemented because contracts already awarded expire, or because projects become massively more expensive. Neither can be in the spirit of the energy transition.”
At the same time, in order to avoid being penalized, project developers would have to secure financing and order components before BNetzA can award the contract. This, argues the German company, is possible for most players only once they are awarded the contract and secured feed-in-tariffs (FIT). This will lead to distortion of the market dynamics as ‘the previous coexistence of financially strong and smaller market players is in danger of being crushed’.
It is hence demanding the government to provide a short-term general extension of 12 months for project completion under EEG when the Parliament votes for the EEG amendment on June 23-24, 2022 and for the Federal Network Agency or Bundesnetzagentur (BNetzA) to ‘issue ordinances’ to be included in the EEG amendment allowing adjustment of implementation deadlines for the same.
Under the Easter Package passed by the German cabinet in April 2022, the country agreed upon annual installations of 22 GW between 2026 to 2035 with an overarching target of 215 GW solar by 2030 under EEG as it targets to become self-reliant in energy generation (see German Government Agrees On Higher 2030 Solar Goal Of 215 GW).