Germany Going Green

By Hannah Bloom

Going green. We see the slogan, or many variations of such, everywhere today it seems. If you haven’t noticed, even the brown napkins at Sparty’s have a green logo on them because they are made from recycled materials. Going green can be put into effect in many ways, like using recycled coffee cups, utilizing an alternative fuel for your automobile like electricity, or heating your home with hot water as opposed to propane. This environment focused movement seems to be spreading every day and many countries are jumping on the bandwagon. One of which is Germany.[1]

Germany ranks number four on the list of greenest countries in the world based on performance.[2] For comparisons sake, the U.S. ranks 28.[3] One piece of legislation that contributes to Germany’s being in the number four spot is called the Renewable Energy Sources Act (Erneuerbare-Energien-Gesetz or EEG for short).[4] One of this Act’s major goals is that by 2050, 80% of the country’s power will come from renewable sources.[5] So what does this Erneuerbare-Energien-Gesetz entail exactly?

The Renewable Energy Sources Act is not a singular piece of legislation, but rather a series of laws that have been passed in Germany dating back to 2000.[6] The Renewable Energy Sources Act of 2000 originally provided for a feed-in tariff (FIT) scheme that was meant to encourage companies to utilize renewable electricity.[7] Feed-in tariffs (FITs) “are the most widely used policy in the world for accelerating renewable energy (RE) deployment, accounting for a greater share of RE development than either tax incentives or renewable portfolio standard (RPS) policies . . . .”[8] In addition, these schemes “drive market growth by providing developers long-term purchase agreements for the sale of electricity generated from RE sources.”[9]

The most recent version of Germany’s Renewable Energy Sources Act was passed in 2014 and was a “major update” compared to previous versions of the law.[10] For example, the previous Act passed in 2000 contained 12 sections and took up 3 ½ pages in the Federal Law Gazette whereas the 2014 update had 104 sections, four annexes, and covered 55 pages in the Federal Law Gazette.[11] “In terms of complexity and rate of revision, the EEG 2014 is starting to look like tax law . . . [and] some of the provisions . . . [are very] complicated.”[12] The purpose of this 2014 version of the law was to:

 enable the energy supply to develop in a sustainable manner in particular in the interest of mitigating climate change and protecting the environment, to reduce the costs to the economy not least by including long-term external effects, to conserve fossil energy resources and to promote the further development of technologies to generate electricity from renewable energy sources.[13]

Getting to substance, the 2014 update to the Renewable Energy Sources Act provides for the transition from the previous FIT scheme to an auction system by 2017.[14] “Auctions refer to competitive bidding procurement processes for electricity from renewable energy or where renewable energy technologies are eligible.”[15] There were also several main objectives of the 2014 revision.[16] Some of these were:

[1] integration of renewable energy and mine gas into the electricity system. The improved market and grid integration shall further the transformation of the whole energy supply system (towards a mainly renewable energy supply);

[2] mandatory direct marketing of renewable energy and mine gas for the purpose of market integration;

[3] financial support shall focus to a greater extent on cost-effective technologies, taking into account medium and long term costs;

[4] adequate distribution of costs based on their cause (Verursacherprinzip) and energy-related aspects;

[5] by 2017 at the latest the amount of financial support under the EEG shall be determined by auctions[.][17]

One might wonder how Germany would go about transitioning from the feed-in tariff scheme to the new auction system. Turns out, Germany’s plan to gain experience with the new auction system is to utilize “pilot projects” with free-standing solar power plants.[18] That is why in 2015 Germany’s government adopted the Ordinance for Competitive Bidding for Financial Support of Freestanding Installations (FFAV).[19]

So is Germany’s Renewable Energy Sources Act working? Yes, in fact, some researchers have even called it a “success story.”[20] Since the first Renewable Energy Sources Act in 2000, there has been an increase from 6.2% to 25.3% in the portion of renewable energy in the gross electricity consumption.[21] In conclusion, it appears Germany’s Renewable Energy Sources Act is working and has successfully integrated more renewable energy into its overall gross electricity consumption. With further research, I would argue that perhaps the United States could benefit from following such a model system like Germany’s.

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[1] See http://www.ecowatch.com/top-10-greenest-countries-in-the-world-1881962985.html.

[2] Id.

[3] Id.

[4] Dr. Matthias Lang, J.D. and Annette Lang, J.D. Overview Renewable Energy Sources Act, German Energy Blog, http://www.germanenergyblog.de/?page_id=283.

[5] Id.

[6] See id.

[7] See Renewable Energy Sources Act – RES Act 2000.

[8] Toby D. Couture et al. A Policymaker’s Guide to Feed-in Tariff Policy Design, v, National Renewable Energy Laboratory July 2010.

[9] Id.

[10] Dr. Matthias Lang, J.D. and Annette Lang, J.D. The 2014 German Energy Sources Act Revision – From Feed-In Tariffs to Direct Marketing to Competitive Bidding, 131 Journal of Energy & Nat. Resources Law, 18 May 2015.

[11] Id.

[12] Id. at 131-32.

[13] § 1 para. 1 Renewable Energy Sources Act – RES Act 2014.

[14]See Renewable Energy Sources Act – RES Act 2014; Lang supra note 10.

[15] Luiz Augusto Barroso et al., Renewable Energy Auctions: A Guide To Design, International Renewable Energy Agency 2015 http://www.irena.org/DocumentDownloads/Publications/IRENA_RE_Auctions_Guide_2015_2_policies.pdf.

[16] Lang supra note 10 at 133.

[17] Id.; Renewable Energy Sources Act – RES Act 2014 supra note 13 at § 2.

[18] Lang supra note 10 at 138.

[19] Id.

[20] Id. at 132.

[21] Id.