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October 28, 2020

Germany goes aggressive on renewables with the latest amendment of the EEG, asking for highly optimistic annual RE additions, says GlobalData

By GlobalData Energy

More rigid targets brought around by the latest revision to renewable energy act (EEG) in June in Germany aims for the country to achieve 65%, instead of the originally targeted 50%, of electricity consumption from renewables by 2030. Such strict targets would mean that during 2021-2030 the country’s solar photovoltaic (PV) and onshore wind would need over 2GW and 3GW of annual installations, respectively – a highly optimistic target in such an uncertain scenario. Making the targets more stringent may be in line with the broader EU green deal agenda and sustainability objectives, but such a call – made a year before elections – may be fuelled by a political motivation rather than be an achievable goal.

For all of the nation’s renewable sectors to be greenhouse gas (GHG)-neutral by 2050, the electricity industry needs to evolve at a much faster pace than has been seen in recent years. Solar PV is now aiming to see a deployment of 18.8GW of capacity from 2021 to 2028 with planned capacity at increments of 1.9GW-2.8GW. However, with respect to the country’s capacity mix in 2019, Germany would need to add approximately 4.6GW annually to meet the target. In reality, the average solar PV annual installations are likely to be approximately 1.4GW-1.5GW.

While annual solar PV installations in Germany have picked up in the last few years, onshore wind installations seemed to be on the back foot and so the faster pace required is even more questionable.

To achieve the new target, 16.7GW of onshore wind capacity is planned to be auctioned by 2025. Therefore, to meet the 2025 target, the country would need to conduct over 4GW of annual onshore wind installations. This is a considerable stretch, as it would mean that the already slumped segment would need to install more than the 3.1GW average seen annually during 2015-2019.

With the current endeavour, overall, the generation from renewables is set to shape up to approximately 50%-60% of the overall generation in Germany by the end of the decade.

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