Germany’s draft renewable energy laws, which the government is seeking to introduce next year, have been heavily criticised by energy storage systems association BVES.
A critical piece of the country’s energy transition (Energiewende) legislature, which originally aims to bring about an economically feasible low carbon society, the German Renewable Energy Sources Act (‘Erneuerbare-Energien-Gesetz’ – EEG) first introduced a feed-in tariff for renewable energy in the year 2000.
With the 20-year remuneration period for those feed-in tariffs set to expire, the Ministry of Economic Affairs and Energy introduced a new EEG in mid-September. The new laws should also enable Germany to comply with European Union policies such as the EU Clean Energy Package as well as the country’s obligations under the Paris Agreement on climate protection.
Valeska Gottke, head of communications and markets for the energy storage systems association BVES, told Energy-Storage.news in an interview that the draft law as it stands, is “bad news for the successful continuation of the Energiewende as it does not bring renewable 'power to the people'”.
“In their analyses of the Market Design Directive and the Renewable Energy Directive II, our BVES legal experts came to the conclusion that the current draft of the EEG does not implement EU law and, if the current draft of the EEG remains unchanged, Germany can be accused of violating EU treaties,” Gottke said.
“The EU Clean Energy Package emphasises strengthening the role in the electricity system of the prosumer – citizens or businesses that generate and consume their own onsite renewable energy, to which battery storage is considered key.”
Yet the new draft law does not even mention the EU Market Design Directive around protecting or supporting prosumers. The home energy storage market, which has been booming in Germany in the past couple of years “has already shown how essential it is for the goals of the Energiewende and may now be forced to fall short of its potential,” Gottke said.
Gottke said that the draft is a testimony to the rigid, innovation-resistant view of the decision-makers on the design of Germany's energy system, which is long overdue in view of the necessary transformation of the energy system towards a climate-compatible system.
“Decarbonisation, digitisation and decentralisation are indispensable guidelines on the road to energy system transformation – and with energy storage systems this is technically possible. The EU laws from the Clean Energy Package want to make this also legally possible.”
Lack of regulatory definition remains among draft law shortcomings but new Innovation Tenders are a rare positive step
BVES produced a list of 10 major criticisms of the EEG 2021 draft. Alongside that lack of support for prosumers which had been expected but had not been delivered, Gottke said that the long-awaited definition of the role of energy storage in the electricity system was again, expected but not forthcoming.
Valeska Gottke wrote a Guest Blog for this site earlier in the year wherein BVES asked that energy storage be considered a vital “fourth pillar” of the modern energy system.
“We were looking forward to that. And according to the current EEG 2021, this is not happening,” Gottke told Energy-storage.news.
In common with many other parts of the world, distributed energy storage is a fairly new addition to the grid, outside of large-scale pumped hydro storage and regulators have been slow to recognise that batteries are neither generation, demand or electricity network infrastructure, but perhaps exist in their own category while performing various roles associated with those types of assets.
The draft law does not recognise that ability of energy storage systems to perform multiple applications, which could not only enable their full benefits to be realised, but also enable asset owners and operators to stack multiple revenue streams, giving their projects a much stronger business case.
In a full interview to be published soon on Energy-Storage.news, Valeska Gottke of BVES said that not all of the provisions of the EEG 2021 are negative. One positive development is the continuation of the recent introduction of so-called 'Innovation Tenders': the first round of these has already happened, at the beginning of September.
“While we generally view the draft of the EEG 2021 very critically, the continuation of the Innovation Tenders until 2028 contained therein is a positive approach,” Gottke said.
Planning for those tenders actually began in 2017, so they have long been in the works, but this year’s first one, launched by the Federal Network Agency (‘Bundesnetzagentur’) allowed interested parties to present bids that included hybrid resources pairing renewable energy generation with energy storage.
There were also separate tender tranches for solar and wind projects. However, solar-only projects were also eligible for the innovation tender, as long as bidders accepted conditions including that they would not be compensated for power produced in the event of negative power prices.
The Bundesnetzagentur said at the end of September that it received 785MW of bids for projects combining generation with storage, mostly solar power with batteries, across 83 projects, versus 50 bids totalling 310MW of solar-only.
“We need to make these innovation tenders really ‘innovative’. The design of the tenders needs some improvement, but it’s a first step in the right direction,” Valeska Gottke said.
“In general, the recognition of the capabilities of storage and the wish to use more renewable-plus-storage systems to smoothen out peaks is a positive signal overall. Tendering procedures should be designed in such a way that the innovation auctions contribute verifiably to a uniformity of feed-in and thus provide real added value for network bottleneck areas. At the same time, more flexibility is needed in the composition of the plant combination and its activities. Market instruments that have been lacking up to now, such as scarcity signals from the grid and a market price risk, could also be created in this way.”