IEEE Power & Energy Magazine - July/August 2015 - 38

opportunities to generate hydroelectricity. The government's
plan to decarbonize the energy system has had to rely mainly
on wind, biomass, and solar PV systems. Since 2009, Germany also has started to connect offshore wind parks in the
Baltic and North Seas. Nevertheless, offshore wind still plays
a minor role in the current electricity mix. In 2014, renewable
energy sources generated 25.8% of the country's electricity.
Effect on Market Prices

Figure 11 depicts the wholesale prices at the European Electricity Exchange (EEX) from 2000 to 2014. Würzburg et al.
provide an extensive overview of studies undertaken to identify the relationships between renewable generation and the
EEX day-ahead price for Germany. They conclude that the
merit-order effect decreases the day-ahead price at the EEX
by approximately €1/MWh per additional gigawatt of renewable generation during 2010-2012. The day-ahead electricity
price at the EEX for Germany has increased somewhat from
1998 to 2014 (roughly €0.02-0.03/kWh).
Retail electricity prices have also increased since 1999 by
roughly 75% and 100% for households and industry, respectively. The increase in retail prices is higher than that for
wholesale prices at the EEX during the same period. It is particularly striking that wholesale and retail electricity prices
moved more or less parallel up to 2011. Since 2011, wholesale
prices actually fell from year to year, while retail electricity
prices increased. The main cause for retail prices not following the downward trend of wholesale prices has been the
German renewable support scheme itself, which is financed
through a surcharge on retail electricity prices (called "EEGUmlage"). Figure 12 illustrates this effect.
In 1998 the share of EEG surcharge, taxes, and other levies hardly played a role for industrial retail electricity prices.
Since 2013, the share of the EEG surcharge has grown significantly, representing in 2013 almost one-third of the retail
electricity price for industrial consumers. In Germany, all the
different components of the retail electricity charges are set
per kilowatthour.
It is remarkable that the German government has maintained generous exemptions from the EEG surcharge for

energy-intensive industry throughout its various amendments.
For example, industries with annual electricity demands of at
least 1 GWh/year and with at least 14% of their gross value
added related to electricity cost have their EEG surcharge
heavily cut; depending on the size of the business and electricity demand, these industries pay either a fixed surcharge
of only €0.05 ct/kWh or a percentage amount of the total
surcharge of either 1% or 10%. The German government
has always been keen that the EEG, a key tool to trigger the
energy transition, does not harm the competitiveness of its
export-oriented heavy industry, as it is one of the cornerstones
of German economic welfare and employment.
Changes in the German Support Schemes

The German regulation regarding renewable electricity generation started in 1991 with the "feed-in-law" and has been based
since then on a FiT system. Grid operators are forced to integrate renewable electricity into the system (granting priority
dispatch and access), pay renewable generators based on the
predefined tariffs, and sell the electricity to distributors and end
consumers. As the tariffs for renewable generation exceed market prices, a deficit evolves for the grid operators. This deficit
is covered by a surcharge on electricity prices of consumers,
called "Umlage."
For Germany, the big change came along with the conversion of the feed-in-law into the renewable energy act (Erneuerbare Energien Gesetz-EEG) in 2000. The 2000 EEG included
several renewable technologies (wind, PVs, hydro, biomass, and
geothermal) and provided sufficient incentives to trigger a substantial growth of installed renewable capacity (see Figure 10).
The EEG also set predefined annual regression rates for FiTs to
represent cost reductions due to technological advances. It also
featured detailed staggering of rates according to installation
size and other characteristics (such as a distinction for rooftop
and nonrooftop PV installations).
The EEG has been amended repeatedly (in 2004, 2009,
twice in 2012, and 2014). The changes were mostly related
to the following:
✔✔ Tariff adjustments. All amendments altered remunerations, most notably in 2012 when PV tariffs were

table 2. Estimations of EEG feed-in-tariffs 1999-2014 by technology (€ct / kWh).
1999 2002-2003

2004-2008 2009-2011

2012 Q1

2012 Q2-2013

Since 2014 Staggering

7.23

7.67

3.50-9.67

3.5-12.67

3.4-12.67

3.4-12.52

Size, new/retrofit

Biogas (waste) 7.23

n.a.

6.16-7.11

4.16-9.00

3.98-6.84

3.8-8.42

Size, source of gas

8.70-10.23

8.40-11.50

7.79-11.67

6.00-14.3

6.00- 14.3

5.85-13.66

Size, type

Geothermal

7.16-8.95

7.16-15

14.50-20.00

25.2

Size

Wind onshore 8.23

6.19-9.10

5.50-7.87

5.02-9.20

4.87-8.93

4.55-8.50

Nonlinear*

5.95-8.74

3.5-15.00

3.5-19.00

3.5-19.40

Nonlinear*

35.49-57.4

21.11-43.01

17.94-24.43

8.92-19.50

8.65-13.15

Size, roof/other

Hydro

Biomass

5.95

Wind offshore
PV

8.23 48.10-50.60

*Wind tariffs are nonlinear. For the first five years a higher tariff is applied, and it is thereafter reduced.
38

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