Feed-in Tariff system under discussion in German elections

This article is based on a feature “plan B für Ökostrom” in Handelsblatt, a German news paper on Sep 10, 2013.

In Germany there is a debate running as part of the upcoming elections on a new scheme to stimulate renewable generation. The system in use so far is based on “feed in tariffs” as per the “renewable energy law” It guarantees a price for renewable generation depending on the type (technology dependent). The cost iod socialized on a per kWh basis. This is leading to high energy prices: Germany’s energy prices for consumers are high, while the process on the open energy market are quite low.

The figure below is a (non-representative) vote of readers of the Handelsblatt on the main issue with the renewable energy system in Germany, which clearly indicates that the main perceived issue is not the energy bill.


There are already experiments going on with a market + premium subsidy model. This is a voluntary scheme. It mains to create a more market directed approach that favors the cheapest sustainable generation sources – though the premium today is still highly technology dependent. It seems like a slightly more entrepreneurial version of the present feed-in tariff system.

There are also other models. In Sweden a quota-model is used: the energy suppliers get a yearly quota of sustainable energy they need to supply. Market forces will create an implementation. The quota may be absolute or relative to total supply. This will favor lowest cost sustainable generation: wind on land. It also requires beefing up the transmission lines to areas with much wind and may lead to landscape overloading.

The last alternative under consideration simply calls for lower feed in tariffs within the existing scheme.


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