Case Study in Germany
In the past twenty years, electricity
feed-in laws have been popular in Denmark, Germany,
Italy and in Spain. Private generators, or producers,
charge a feed-in tariff for the price per unit of
electricity the suppliers or utility buy. The rate
of the tax is determined by the federal government.
In other words, the government sets the price for
electricity in the country. Because the producer is
guaranteed a price for the electricity, if he meets
certain criteria, feed-in laws help attract new generation
capacity.
The benefits of feed-in tariffs
include:
1. They catalyze large installments
of renewable electricity
2. They ensure technically efficient
operation of the plant
3. The transaction costs and administrative
costs are low
4. They reduce risk in business plans
for new investment
5. They allow small cooperative groups
and companies to participate
Germany's Stromeinspeisungsgesetz:
PREDAC, European Actions for Renewable Energies
In the last four years, Germany quadrupled its installed
PV capacity and became the world leader in wind development.
Much of this success is due to Stromeinspeisungsgesetz,
literally meaning the Law on Feeding Electricity from
Renewable Sources into the Public Network. This Electricity
Feed Law sets the price for renewable electricity sources
at 90% the retail residential price. There are a few
exceptions, one for example being that small utilities
whose average electricity price would raise significantly
are exempt.
Consequently, in the 7 years (1991-1997) following the
passage of the law, grid-connected PVs rose from 2 MW
to over 11 MW- a 450% jump. Prices also fell during
the same period, from 27,000 to 17,000 deutsche marks
per kW. In 2002, Germany installations were at 85 MW!
This policy success is attracting companies such as
Shell and RWE Schott to invest in German PV, with projects
to produce 9 and 24.5 MW respectively in 2002.
Because of the Electricity Feed Laws, Germany pays wind
turbine owners about 9 cents/kWh. For photovoltaics,
Germany pays 50 cents/kWh for projects less than 5 kW
(Gipe).
Resources:
Renewable
Energy Policy Project, Renewable Energy
Policy Outside the US
Electricity
Feed Laws in Europe, by Paul Gipe
PV
Market Update, Renewable Energy World
|
