BWE’s proposals for new energy policy

Last month, the German Wind Energy Association (BWE) published its ideas about how German energy policy could be changed. The focus is clearly on onshore wind farms; in fact, the word "offshore" does not even occur.

The international economic press continues to speak of the slow development of offshore wind in Germany as an indication of a lack of progress in the country's energy transition, as a generally misleading report at Bloomberg showed last week. In reality, German wind power has largely been driven by citizens and small businesses over the past 20 years, and they are not excited at the prospect of large corporations – often the very ones who attempted to block their investments – setting up offshore wind turbines.

Not only is the electricity from offshore wind more expensive, but a concentration of power generation in just a few locations (in this case, in the North and Baltic Seas) would require more grid expansion – all of which would raise the cost of the energy transition for consumers. Germany's traditional onshore wind sector is therefore skeptical of offshore wind.

Last week, Sylvia Pilarsky-Grosch was elected the new BWE president. She replaces Hermann Albers, who has become vice president.

Bundesverband Windenergie

A few of the ideas proposed show that the BWE is not trying to ensure the greatest possible payback for wind investors, but still has its eye on making the energy transition a success – and reducing public concern about rising prices. The most salient example is the call for the bonus paid for grid integration (the technical term in German is "system services bonus") to be done away with altogether.

The BWE correctly, though perhaps surprisingly, points out that wind turbines are required by law to stabilize the grid by providing more reactive power (just as conventional plants do), so paying a bonus for this service provides no incentive. "Wind turbine owners should cover the additional technical costs themselves, which would save [consumers] some 30 million euros per year," the organization explains in the press release (in German).

Another proposal that may surprise you concerns payment for wind power that the grid cannot take up. At present, 100 percent of the power lost – essentially, excess wind power – has to be paid for in full, but the BWE is asking for that amount to be dropped to 80 percent, with 20 percent to be paid directly by the grid operator as a sort of penalty/incentive to encourage grid expansion. Spain has had a similar compensation model for the past decade for wind power.

The main other change proposed is a switch from the two-stage feed-in tariffs design to a single feed-in tariffs. At present, a sort of "startup" feed-in tariff of close to nine cents is offered for the first five years and drops closer to five cents for the last 15 years of the 20-year contract depending on local wind conditions; specifically, the rate offered for wind turbines located in areas with little wind is reduced less after the first five years based on a theoretical "reference turbine" representing 100 percent of the volume of electricity that could be generated on average. The BWE would like to spread that bonus across the entire 20-year policy duration, with the highest feed-in tariffs paid starting at 5.9 cents and rising to 9.6 cents in the areas with the poorest wind potential. (Craig Morris)