Greentech started to develop its business in Germany in the wind sector in 2001, owning today one wind farm with a total gross installed capacity of 23.4 MW.
Greentech installation is regulated under the German Government’s legislation on renewable energy sources in the electricity sector (EEG) (2000) and the amendments issued in 2008.
The German Renewable Energy Sources Act (Erneuerbare-Energien-Gesetz (EEG) sets the basic parameters of the tariff system which apply equally to all types of renewable energy sources, set out below:
> The commencement and duration of the tariffs paid: 20 years plus the commissioning year from the start-up of a new installation. After the first 20 years of operation counting from the commissioning date, the energy produced is sold at the daily market price per kWh;
> The calculation of the tariffs in accordance with the capacity of the installation in relation to the threshold value to be applied in each case (principle of gliding tariffs);
> Degression: different feed-in tariffs and degression rates apply to each renewable energy source. Since May 2012 monthly degression has applied to PV energy while for all other types of renewable energy the tariffs change only with the start of a new calendar year. The PV feed-in tariffs are basically lowered monthly by a percentage of 1%. This degression rate is not fixed, but varies depending on the amount of newly installed capacity.
The EEG is normally reviewed every three to four years, but due to the rising of energy costs, the version of the EEG entered into force in August 2012 was reviewed, and a new Renewable Energy Reform took place already in April 2014.
In August 2014, the new Renewable Energy Act entered into force. With the new Law, the government plans to increase the share of renewable sources to 40-45% of total electricity production by 2025 and to 55-60% by 2035. It will scale back green subsidies and will impose technology-specific deployment caps, initiating a transition to competitive bidding. For each of the key renewable technologies, the Act sets a target amount of installed capacity:
> Onshore wind: 2,500 MW increase per year, with : €0.06 to €0.09 per kilowatt-hour (kWh), depending on local wind conditions. This tariff for new projects will decline by 0.4% each quarter.
> Solar photovoltaics: 2,500 MW increase per year, with €0.09 to €0.13 per kWh, depending on the size of the plant. This tariff will decline by 0.5% monthly.
> Offshore wind: 6,500 MW by 2020 (implying an increase of about 800 MW per year).On average for the whole 20 years, they will receive €0.13 to €0.14 per kWh. The tariff will be reduced in 2018 by €0.01 per kWh for the first 8 years.
> Biomass: 100 MW increase per year with €0.06 to €0.24 per kWh, depending on the type of biomass and the size of the power plant. This tariff will decline by 0.5% each quarter.
> Hydropower and geothermal have no targets since there is little development activity and limited potential. The tariff for hydro will be €0.04 to €0.13 per kWh, depending on the size of the plant. This tariff is reduced by 0.5% each year.
The next reform will introduce competitive auctions for renewables, to go into effect in 2017. The goal will be a more competitive process of setting the tariff for renewables. To test the process, the just-enacted reform includes a pilot auction scheme for 600 MW of ground-mounted photovoltaics annually.