The most important legal instrument in Germany to support the production of electricity from renewable sources is the Renewable Energy Source Act (EEG), which first came into action in the year 2000. Since than the EEG has been amended in 2004 and recently in 2008 to cope with the chancing requirements. The EEG regulates the preferential connection of plants that produce electricity from renewable energy sources and the purchasing, transmission and payment of electricity by the operator of the grid. The EEG defines payment rates for every kilowatt hour of renewable electricity that is fed into the public grid. The basic payments differ according to the type of renewable energy source, the conversion technology and the capacity of the plant.
The level of fees shall be determined according to the share of a plant’s capacity which falls between the relevant threshold values. In this case, the capacity of the plant will not be deemed to be its effective electrical capacity, but rather the ratio of the total of the kilowatt hours to be fed in to the grid during the calendar year in question to the total number of full hours for that calendar year. The Table (will be inserted soon) shows the EEG payments according to the updated amendment (valid since January 1st 2009).
The basic payment is subject to an annual degression of 1% based on the basic rate applicable in the previous year. The EEG guarantees the plant operators fixed tariffs for electricity fed into the grid for a period of 20 years – plus the year it was taken into operation. The fee paid depends on the defined tariff in the year the equipment was installed. The EEG also stipulates an additionally increase in the electricity payments through various cumulative bonuses that are linked to specific conditions. There are e.g. bonuses for the utilisation of renewable raw materials specifically grown for energy production (biomass bonus), for the external utilisation of the heat produced (combined heat and power) and for the use of innovative technologies such as Stirling engines, fuel cells or upgrading biogas to natural gas quality (biomethane).
In the last four years, the EEG’s payment regulations have led to a considerable increase in electricity production from biomass. With the improvement of the payment rates as part of the revision of the EEG in 2004, energy production in farm biogas plants expanded noticeably and this is reflected by the quantity of plants. And the second EEG amendment enhances the conditions for biogas e.g. by increasing the basic payment up to 150 kW, introduce a bonus for greater utilisation of farmyard manure and slurry and landscape conservation materials and also increase the bonus for the use of renewable materials and surplus heat. But is also obligates e.g. to the use of sustainable produced biomasses and to meet certain environmental requirements.
The English version of the German Renewable Energy Sources Act (EEG) can be found here.
The broschure "The Renewable Energy Sources and Renewable Energies Heat Act" produced by the Federal Ministry of Food, Agriculture and Consumer Protection (BMELV) can be found here.