Under the "three pronged" approach, Germany will increase support for renewable energy

    The European Commission has approved three additional measures to support the installation and adoption of more renewable energy in Germany under EU state aid rules.

    These include changing the tender payment structure to promote innovation from a fixed market premium to a variable sliding market premium. The aim is to ensure that generating facilities are not overcompensated for the power they provide when electricity prices are high. Generators will receive a market premium on top of the market price.

    However, under the original fixed market premium model, the premium remains unchanged even if the energy price rises or falls, leading to overcompensation for power producers. The sliding market premium, which is based on changing market prices, Bridges the gap between the cost of generating electricity and the market price.

    Germany will also introduce financial incentives for consumers to invest in small rooftop PV systems to encourage more power to be exported to the grid, rather than limiting users to self-consumption.  

    Germany plans to hold another round of ground-mounted PV and rooftop PV tendering this year to procure more PV power. The move was a response to undersubscription in two rounds of tenders earlier this year. An auction in July this year was undersubscribed, with only 714MW of PV systems being tendered, out of a planned capacity of 1.126GW.

    So under a new measure, if there are not enough bidders, all bids will be awarded at their price.

    The three measures aim to strengthen Germany's commitment to market-based mechanisms to support green electricity production, providing tailored measures for the deployment of different renewable energy sources.

    These three measures are expected to complement the German Renewable Energy Law and further contribute to the achievement of Germany's environmental objectives and the EU's strategic objectives related to the EU Green Deal.

    Margrethe Vestager, Executive Vice President for Competition Policy at the European Commission, commented, "The new measures will prevent overcompensation to generators during periods of high electricity prices and help improve grid stability. These additional measures will further strengthen the targets of the Renewable Energy Bill programme while helping to reduce greenhouse gas emissions and supporting the objectives of the EU Green Deal."

    Under laws passed by the Bundestag, Germany must generate more than 80 percent of its electricity from renewable sources by 2030 to ensure energy security. In addition, Germany plans to install 215GW of PV systems by 2030.