Amendment to the Renewable Energy Sources Act –
an Assessment for the Green Wood and Waste Wood Sector
Following the submission of the Federal Cabinet’s draft of the Renewable Energy Sources Act (EEG) 2021 last autumn, we are generally satisfied with the outcome of the EEG amendment, especially in the green wood sector, and we are optimistic that the biomass sector can continue to make its contribution to the energy transition. The tailwind from politics can definitely be felt.
We had already addressed some positive points in our article last year, such as the increase in the volume of tenders to 600 MW and the bidding maximum for new and existing plants by 1.5-2 ct/kWh each for new plants and for existing plants, as well as the extension of the implementation period between the end of the auction and commissioning to 36 months. The feed-in priority also remains in place for all waste wood plants, regardless of their entry into force, as waste wood falls under the broad biomass concept of the EEG and thus continues to count as renewable energy. The narrow biomass term according to the Biomass Ordinance and the broad term have now also been defined in the Act for the first time.
It is particularly positive that the planned reduction of the remunerated rated output from 80 % to 65 % was not implemented after all. The economic, technical and logistical problems for power plant operators would probably have been immense. Fortunately, improvements were made and the originally planned 65 % was increased to 75 %.
The new EEG therefore offers a good prospect that new biomass cogeneration plants will be built in the future, as well as planning security for customers and suppliers. A positive effect would be that less biomass from Germany would have to be exported abroad, thus promoting the use of domestic resources. “One point, however, whose impact is currently not foreseeable for us, is the cancellation of the top 20 % of bids in insufficiently covered tenders,” says Philipp Pinnow, sales manager for the division of renewable raw materials.
Matthias Warnke, head of the waste wood unit, reports: “The news about the follow-up subsidy for existing waste wood plants came as quite a surprise in mid-December. Although we were aware of the activities through our interest group (the BAV), at no time it was apparent to us that there would still be a change of course in waste wood in the draft of the new EEG.” He explains: “Many of our partners as well as the entire waste wood industry are now intensively thinking about the effects of this short-term change. At first, it can be assumed that only new capacities will emerge in the market in the next two years, partly also in foreign countries close to the border. Although the past has shown that in the end there was always enough waste wood for everyone, our first gut feeling is that competition for the material will be much more fierce in the future. We are motivated by this change in the Act to expand our international activities in order to be able to react better and more flexibly with imports in the event of any supply bottlenecks and thus to be able to guarantee a stable supply situation.” Matthias Warnke remains confident, because one piece of wisdom has always proved true in waste wood: “You never know how things turn out.
So things remains exciting and of course we hope that the majority of the effects of the amendment to the EEG will be positive and that any fears will not come true.