Editorial May 2017

In recent weeks, there has been a lot of talk about the results of the first round of tenders for offshore wind energy in Germany, which showed that investors believe that no subsidies will be necessary in future. After years of debate on the excessive costs of offshore wind energy resulting in a significant reduction of the expansion target for offshore wind by 2030 some people now suggest that offshore wind is more competitive than onshore wind. While it was wrong to cut down offshore expansion a few years ago, it is now equally wrong to pretend that onshore wind has a cost problem.

There are two key aspects to this consideration: When will the wind farms be constructed? How will the electricity price develop? The offshore wind farms without subsidies will be connected to the grid in 2024/25. The onshore wind farms chosen in the current onshore tender will be on the grid just three to four years from now. The subsidies for onshore windfarms announced by the German Bundesnetzagentur on May 19^th have an amount of 5,5 € cent per kilo watt hour at standard place. This means for very suitable places near the coast that operators will receive 4,5 € cent per kilo watt hour there. If the average price at the electricity stock exchange in Leipzig in 2021 will exceed 4,5 € cent per kilo watt hour, the subsidies for onshore windfarms will not rise any more meaning that they could exist without subsidies whatsoever.

The renewables situation is exciting but always needs interpretation. All renewable energy sources, the main components of the energy transition, have reached a point in their cost development at which they will barely raise the Renewable Energy Sources Act l levy, or will not raise it at all - including photovoltaics. It is our duty as a sector to explain these circumstances fairly and comprehensibly. Only in this way all political representatives will understand that the Renewable Energy Sources Act levy is primarily a historical cost burden, which will hardly increase with additional construction of renewable plants. There is no reason to further limitation of the expansion of renewables.