The most important legislative instrument available to promote the generation of electricity from renewable sources is the Renewable Energy Sources Act (EEG). It regulates the supply and remuneration of electricity generated entirely by renewable energy sources through electricity distributor, which operate the common power supply. The EEG first entered into force in 2000, with later amendments taking market developments into account in 2004, 2009, 2012, 2014, and 2016, respectively. This Act obliges the grid operators to connect installations generating electricity from renewable energies to their grid on a priority basis, as well as to purchase the electricity generated at fixed rates of remuneration. The legislature has thereby immensely improved the regulatory framework for the generation of electricity from renewable energies. The level of remuneration differs depending on the type of installation and its capacity level. Prior to the revision in 2016, the remuneration period amounted to 20 years, plus the year in which the installation entered into service. The basic remuneration and the bonuses are subject to an annual degression: this amounts to 1 percent for installations entering into service until 31.12.2011 (EEG 2009), and 2 percent for installations entering into service from 2012 onwards (EEG 2012). Due to the EEG 2016 the remuneration will not be predefined legally any longer, but oriented by biddings at the open-market.
Biogas and biomass installations
For biogas and biomass installations going into service from 2012 there is an extra input substrate tariff; this is apart from the graduated basic remuneration and it is subdivided into two classes: input substrate tariff class 1 includes energy crops such as maize or beets; input substrate tariff class 2 includes ecologically-advantageous substrates like slurry, material from landscape conservation or new energy crops such as wild flowers. The input substrates in class 2 receive a somewhat higher remuneration than those in class 1. The additional remunerations for both classes do not come within the scope of the annual degression. Bonuses are granted for bio waste fermentation plants and also for biogas upgrading. There is also a special remuneration for so-called small slurry plants, with a maximum electrical capacity of 75 kW (§44). New elements introduced with the EEG amendment of 2012 are a binding minimum use of the produced heat and a limit on the input of maize and grain kernels. Operators' obligation to present documentary proof within the framework of the EEG encompasses documentation on the input substrates used and the checking of these data by the environmental auditor.
In 2018, the surcharge will be 6.79 ct/kWh to cover the costs of the electricity supply paid in accordance with the EEG.
The EEG surcharge is published annually by the transmission system operators in mid-October for the following calendar year on the basis of expert forecasts. The Federal Network Agency monitors the proper identification. For 2017, the surcharge was 6.88 ct/kWh.
For the year 2018, transmission system operators expect a further 8 gigawatts increase in renewable energy. As a result, the expected production volume from renewable energies rises to 204 TWh. As in previous years, the EEG surcharge includes a liquidity reserve in the following year, which serves as a hedge against negative account balances and against liquidity risks. The reserve was left unchanged at 6 percent compared to the previous year.