Sunday, December 13, 2009

German environmental minister speaks of "clear overpayment"

In the Friday issue of Handelsblatt (premium content, so see Bloomberg), Norbert Röttgen says Germany's Renewable Energy Act is "too inflexible." It sounds as though he not only wants to have a one-off rate reduction, which seems likely anyway, but also tweak the system itself.

Currently, if the 1,500 MW ceiling is surpassed, the automatic reduction (around 9%) increases by 1%. Perhaps he is thinking that this added reduction is too marginal, especially since Germany actually installed some 2,400 MW from Q4 2008 to Q3 2009. And the forecast for 2010 is even greater.

So maybe we will get some heavy reduction if the ceiling is reached - which would not be the end of the world as long as the first 1,500 MW are retained. After all, Germany's 3,200 MW for 2009 as a whole (forecast, but another forecast is for 2,200) is slightly more than 50% of new installations globally, a share that is far too great (the US probably won't make up 10%). So if the others can't catch up, maybe Germany will have to slow down?

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