A Projekt group wind farm impacted by the new regulations.
The Electricity Price Cap Act (StromPBG) establishes notional surplus revenues for different energy sources. In the case of renewable energies, these revenues are determined from the product of the electricity volumes generated and the respective monthly market value specific to the energy source [1]. After deduction of the specific costs, which are differentiated according to the energy source technology, the calculated LCOE must be borne by plant operators. 90% of the revenue exceeding the maximum yield goes to the authorities. The remaining 10% are intended to provide an incentive to continue producing in line with demand.
This is in contrast to European law, which in principle introduced a revenue cap of 180 euros per MWh to allow the generators concerned to "cover their investment and operating costs" [2].
Section 16 of the StromPBG provides details on the remuneration levels in Germany. Contrary to the EU's requirement that revenues be capped at EUR 0.18/kWh, renewable energy revenues are being skimmed more dramatically in Germany [3].
Payment of surplus proceeds must be made by the 15th calendar day of the fifth month following the respective accounting period. Plant operators who have concluded a contract (Power Purchase Agreement, PPA) with a direct marketer before 31 November 2022 must take into account a lower limit of EUR 8 per MWh in the reference costs, and the safety margin is set at EUR 1 per MWh.
This intervention comes as a surprise since the requirements of Art. 8 (2) of the EU Regulation call for "non-discriminatory and proportionate implementation". As recently as 2021, a study by Fraunhofer ISE on the electricity production costs of renewable energies had determined the return on equity employed for wind onshore to be 7%, while the return for lignite and hard coal-fired power plants was determined to be at least 11% over a service life of between 30 and 40 years.
"Basically, we have to question the compatibility with property rights according to Article 14 (1) of the German constitution, as well as the proportionality of the measure, which hinders the expansion of renewable energies. Even though we are pleased about the trust of our customers and the resulting orders for the complex determination of revenue skimming for wind farms with an installed capacity of more than 100 MW, the unequal treatment of coal-fired power (no profit skimming) and renewables is certainly problematic. But unfortunately we have already experienced enough of that in the past [4]," says Ubbo de Witt, managing director of Projekt GmbH.
