The Renewable Energy Sources Act (EEG)

Renewable energy is to form the cornerstone of Germany’s future energy supply. The German government’s goal is for 80% of the country’s electricity to be generated from renewables by 2050. The legislature has developed a range of measures to support this aim, most notably the Renewable Energy Sources Act (EEG).

In addition, the Combined Heat and Power Act (KWKG) promotes the generation of electricity by combined heat and power plants. This is because producing heat and power at the same time is extremely efficient and therefore environmentally-friendly. As a TSO, we are responsible for implementing these legal requirements, making us a key player in the promotion of renewable energy use.

The principles behind the Renewable Energy Sources Act

The Renewable Energy Sources Act (EEG) is based on two fundamental principles:

  • Feed-in of electricity generated from renewable energy sources must be prioritised over all other production sources – such as traditional power stations – and the grid operator is obliged to accept it (purchase obligation).
  • The EEG specifies fixed tariffs for electricity from renewable sources. The rate paid is generally subject to degression; in other words, the amount received by new plants is reduced by a certain percentage each year. The rate is fixed for a certain term from the year of commissioning; this is almost always 20 years.

 

 
The Renewable Energy Sources Act (EEG)

We are responsible for handling the EEG levy in a transparent way. Operators of renewable energy production plants – such as a wind farm or roof-mounted PV arrays – generally feed the electricity they produce into the distribution grid. The distribution grid operators pay the producers at the statutory rate, and then pass the electricity on to the TSOs. The four TSOs – 50Hertz, Amprion, TenneT TSO and TransnetBW – sell the electricity in a transparent and non-discriminatory manner on the electricity spot market. Since 2012, producers have been able to market their own electricity through the market premium scheme, rather than through TSOs. Under the scheme, they receive a market premium from the grid operators in addition to their market revenue, and this premium covers the differences between the fixed tariff and the market value of the renewable electricity. The difference between the costs of the guaranteed payment and earnings from the market is equalised via the EEG levy. The power suppliers charge this levy to the electricity customer (end consumer) on a per-kilowatt-hour basis, and pass it on to the TSOs. The TSOs calculate the following year’s EEG levy and publish this information by 15 October each year.

Their calculation is based on predicted income and expenditure, calculated by independent research institutions and based on the latest scientific and technical knowledge. Differences between predicted and actual income and expenditure, including interest, are taken into account in the calculation of future levies.

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