Feed-in tariff

A feed-in tariff , also known as a feed-in tariff, is a state-determined tariff for electricity that is used to promote certain types of electricity generation . As a rule, these are renewable energies , i. H. Wind power , solar , hydropower , geothermal and biomass plants , but in some countries other types of electricity generation also receive a feed-in tariff.

In 2013, for example, Great Britain promised the operators of the planned Hinkley Point C nuclear power plant a feed-in tariff of 92.50 pounds per MWh plus inflation compensation , as the electricity production costs of this power plant are around twice the UK electricity exchange price. In 2012, Great Britain, France, Poland and the Czech Republic demanded subsidies for electricity generation using nuclear energy , which, in addition to aid in the construction of nuclear power plants, also provide for a feed-in tariff for the nuclear power produced in order to be able to realize economically unprofitable nuclear power plant projects.

General

The feed-in tariff is a minimum price system that makes it possible to integrate forms of generation into the market that are not able to compete with other forms of generation based on their market price alone. It gives investors planning security. Feed-in tariffs are usually designed to be degressive . The remuneration is reduced regularly, for example annually, by a certain percentage. This deliberately creates cost pressure so that the providers of subsidized systems are forced to produce more efficiently and cost-effectively. The long-term goal is that the new technologies can survive on the market without any help. The social scientists Weert Canzler and Andreas Knie consider the guaranteed feed-in tariff combined with the feed-in priority and the associated planning security to be the real secret of the EEG's success.

distribution

In 2012, feed-in tariffs for renewable energies were introduced in 20 of 45 European countries; other funding models for renewable energies, such as the quota or tendering model, were much less common. An online database of the Federal Environment Ministry provides an overview of the amount of the feed-in tariffs in the EU.

A well-known example of a regulation based on feed-in tariffs is the Renewable Energy Sources Act (EEG) in Germany. This law served as a model for the expansion of alternative power generation worldwide. Its basic structure was adopted by at least 65 states and 27 states or provinces worldwide by the beginning of 2012, while the quota model and the "minimum supply obligation for alternative energies" (Renewable Portfolio Standard, RPS) were issued in around 18 states and 53 other jurisdictions . This makes the EEG the most widespread mechanism for promoting alternative energy generation. In total, renewable energies are promoted in 109 countries. The long-term, reliable feed-in tariffs granted by the EEG were an important factor in the sharp drop in costs for photovoltaics , which enabled it to move from an expensive niche technology to a widespread technology. The EEG's predecessor was the Electricity Feed Act passed in 1990, which obliged electricity supply companies in Germany to purchase and pay for electrical energy from regenerative conversion processes for the first time .

Since the EEG amendment in 2014, there are plans to switch from feed-in tariffs to tendering procedures. The main reason given for this change in the funding mechanism was the expected cost savings. However, the opposite effect occurred in the first round of tenders carried out in 2015, so that the prices determined through tenders were at a significantly higher level than the fixed feed-in tariffs previously paid.

effectiveness

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A feed-in tariff is considered to be the most effective funding mechanism for expanding renewable energies. A number of studies have shown that countries that rely on feed-in tariffs achieve lower subsidy costs and, at the same time, more renewable energies than countries that rely on other subsidy models. Based on experience with various funding mechanisms, there is a strong consensus among scientists that feed-in tariffs are more effective and cheaper than quota-based funding systems. The countries that have most successfully shaped the expansion of renewable energies, Germany , Denmark and Spain , have all brought about this expansion with feed-in tariffs. States with quota regulations such as B. Great Britain and Italy, however, were less successful. In addition, well-coordinated feed-in tariffs guarantee operators a high level of income stability over the lifespan, which means a high level of investment security. This in turn lowers costs, since operators can borrow money on more favorable terms than with uncertain income flows, and reduces the need for high returns on capital .

Compared to market premium models in particular, feed-in tariffs have the advantage that they can get by with lower funding levels while being equally attractive for investors, as they offer greater security than these models. This is made possible by the fact that risk-averse investors are willing to accept lower returns if the returns are more secure thanks to fixed feed-in tariffs. The effect is estimated at approx. 10 euros / MWh, which in the examined case corresponded to a cost saving of up to 40%. In addition, feed-in tariffs promote better technological progress, which also lowers costs.

In 2011, the consulting firm Ernst & Young found fixed feed-in tariffs to be superior to the quota models and bonus / premium systems in terms of cost efficiency , applicability and diversity of actors. For this reason, some countries such as Japan and China, which previously used the latter models, are now relying on feed-in tariffs. A 2004 study by the Massachusetts Institute of Technology (MIT) came to a similar conclusion. In 2008, an EU study came to the conclusion that well-designed feed-in tariffs are the most efficient and effective support mechanisms for the expansion of renewable electricity generation.

literature

• Sebastian Panzer: Alternative investments: investing directly in renewable energies. Tectum, Marburg 2011, ISBN 978-3-8288-2551-2 (also diploma thesis at the Neu-Ulm University of Applied Sciences ).
• Beate Sander, Peter Fath, Anka Leiner: Investing sustainably: in sun, wind, water, geothermal energy and Desertec . FinanzBook, Munich 2010, ISBN 978-3-89879-565-4 .

Web links

• Electricity feed-in laws and tariffs - global overview
• Feed-in tariffs through the Renewable Energy Sources Act from 2005 - Overview of feed-in tariffs
• Feed-in tariffs - information from the Federal Office of Energy (Switzerland)

Individual evidence

1. ↑ Cooperation with China: Great Britain is building the first nuclear power plant in decades . In: Spiegel Online . October 21, 2013. Retrieved November 16, 2013.
2. ^ Britain, EDF strike deal on nuclear project . In: Global Post. October 17, 2013. Retrieved October 18, 2013.
3. ↑ Competition with renewable energies. EU states are demanding subsidies for nuclear power. In: sueddeutsche.de . April 13, 2012.
4. ^ Weert Canzler , Andreas Knie : Smart networks. How the energy and transport turnaround succeeds. Munich 2013, p. 69.
5. ^ Franz Alt : The energy gap in France proves that the German EEG is a model for success. In: sonnseite.de. February 11, 2012, accessed April 1, 2020 . 
6. ↑ Federal Ministry for the Environment: RES Legal ( Memento of the original from March 26, 2012 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. Retrieved April 11, 2012.  
7. ↑ Renewables Global Status Report 2012. , pp. 14, 17, 66f., 70–72, 118f., REN21
   GSR Policy Table ( Memento of the original from March 17, 2013 in the Internet Archive ) Info: The archive link was automatically inserted and still Not checked. Please check the original and archive link according to the instructions and then remove this notice. 
8. ↑ Cf. Matthias Günther: Energy efficiency through renewable energies. Possibilities, potentials, systems . Wiesbaden 2015, p. 74.
9. ↑ Energy transition: is the federal government failing to cut costs? In: Wirtschaftswoche . April 27, 2015. Retrieved April 29, 2015.
10. ^ Wong et al: Recent advances of feed-in tariff in Malaysia . In: Renewable and Sustainable Energy Reviews . 41, 2015, p. 44, doi: 10.1016 / j.rser.2014.08.006 .
11. ↑ ^{a b c} El Kasmioui et al .: The 2013 reforms of the Flemish renewable electricity support: Missed opportunities. In: Renewable Energy . 83, 2015, p. 914, doi: 10.1016 / j.renene.2015.05.023 .
12. ↑ Zeineb Abdmouleh et al: Review of policies encouraging renewable energy integration & best practices. In: Renewable and Sustainable Energy Reviews . 45, 2015, pp. 249–262, doi: 10.1016 / j.rser.2015.01.035 .
13. ↑ Lena Kitzing: Risk implications of renewable support instruments: Comparative analysis of feed-in tariffs and premiums using a meanevariance approach. In: Energy . 64, 2014, p. 504, doi: 10.1016 / j.energy.2013.10.008 .
14. ↑ Fixed feed-in tariffs for renewable energies are gaining ground worldwide  ( page can no longer be accessed , search in web archives )  Info: The link was automatically marked as defective. Please check the link according to the instructions and then remove this notice. . In: Schweriner People's Newspaper . August 31, 2011. Retrieved February 25, 2012.  
15. ↑ Lucy Butler, Karsten Neuhoff: Comparison of Feed in Tariff, Quota and Auction Mechanisms to Support Wind Power Development . Cambridge Working Papers on Economics CWPE 0503, 2004.
16. ^ The support of electricity from renewable energy sources. ( Memento of the original from May 9, 2009 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. (PDF; 385 kB). Retrieved February 25, 2012.