New Market Perspectives for large-scale PV Installations ...

Bundesverband Solarwirtschaft e.V. (BSW-Solar)

New Market Perspectives for large-scale

PV Installations in Germany

- regulatory framework, targets and changes -

German Solar Association

Feb. 13th, 2019

German Solar Association: Who we are

© BSW-Solar

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TASK To represent the solar industry in Germany in the

thermal and photovoltaic and storage sector

VISION A sustainable global energy supply provided by solar

(renewable) energy

ACTIVITIES Lobbying, political advice, public relations, market

observation, standardization

EXPERIENCE Active in the solar energy sector for over 40 years

REPRESENTS More than 800 members along the complete value

chain active in the solar business

HEADQUARTERS Berlin, Germany

www.solarwirtschaft.de

https://www.solarwirtschaft.de/en/about-us.html

Services on the German market

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Exploring solar markets worldwide

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Worldwide activities of the Association

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Cooperation with solar

organization Projects Projects/Cooperation with solar

organization

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Agenda

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• Recent German PV market development

• Political background and discussion

• Regulatory changes for large-scale PV

installations

• Summary & Outlook

Recent Market Development (I)

• In 2018 German PV market was growing for the third time in a row

• Commercial segment has recently been the main market driver

• Installation of ground mounted PV is concentrated in eastern Germany

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160 MW

PV Market Segment Development in Germany Regional spread of ground mounted

PV projects since 2015

( 1.7 GW in total)

Recent Market Development (II) - Tender

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• Since first round in April 2015 average strike prices nearly cut in half

• Intensity of competition has been constantly high

• So far more than 90% of rewarded projects were realized in time

PV tender results and level of strike prices since April 2015

Political background – Extra tenders

• Coalition agreement of government demanded 4 GW extra capacity for

each PV and Wind until 2020

• Agreement required that the grid has to be prepared for higher RE

share

• The negotiations were difficult and took longer then expected

• Finally a revision of the German renewable energy act (EEG) was

adopted in late fall 2018

• The compromise included the agreed volumes of extra tenders for both

PV and Wind installations until 2021

• On the other side in order to improve grid stability and system

integration of RE innovation tenders were introduced

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Picture: BSW-Solar

What’s new in detail?

• Extra Tenders:

– Germany will put out additional 4 GW for tender until 2021

– The auctions will be conducted according to the existing rules for

PV tenders, like f.eg.:

• minimum Size of 750kW

• maximum Size of 10MW

• special requirements regarding the area of installation

• Innovation Tenders:

– Aim of innovation tenders is to examine new pricing and auctioning

mechanisms to increase competition and to proivde more grid

friendliness of RE installations

– In sum 1.15 GW are planed to be tendered that way until 2021

– Detailed requirements for the participation will be settled in a

special regulation this year

• New, reduced volumes for regular PV auctions

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Scheduled auction dates and volumes

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Extra Tenders - 4 GW extra PV capacity

• In order to increase the competition, extra tenders will grow from

1 GW in 2019, to 1.4 GW in 2020 up to 1.6 GW in 2021

• Compared to the 600 MW PV capacity which has so far been tendered

per year this is a significant increase

• German Solar Association estimates that this might correspond to an

additional sales potential between 3.5 to 4.5 billion EUR for companies

active in Germany

• The first extra-tender round is scheduled for March

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Dates and volumes Extra tenders in Germany

New Innovation-Tenders

• Innovation tenders were already included in the renewable energy act

of 2017, yet have never been implemented

• Now the new agreement includes even higher volumes

• Special regulation will determine the conditions

• The regulation might include:

– no compensation when market prices are negative

– incentives for hybrid installations (f.eg. PV-Wind combination)

– fixed market premium

– …

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Dates and volumes Extra tenders in Germany

Summary & Outlook

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• Germany introduced the tender support scheme for PV installations

above 750kW in 2015

• So far results demonstrate high competition and a significant price

decrease over the past years

• After a long debate German government decided to introduce extra

tender volumes, starting with 1 GW in 2019, 1.4 GW in 2020 and

finally 1.6 GW in 2021

• According to our estimations this will in sum induce additional

investments of about 3 to 4 billion Euros in the German PV market

• Ongoing high competition and low levels of average strike prices are

expected

Source: Solarmarkt

Thank you for your attention…

David Krehan Political Advisor

[email protected]

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Legal framework for tenders

Intersolar Europe Webinar, February 13, 2019

Dr. Hartwig von Bredow

We offer comprehensive legal support for companies in the field of the production, storage and consumption of renewable energies

Conceptual and strategic advice

Drafting and reviewing of contracts

Representation in administrative proceedings, proceedings concerning

energy law and civil litigations

Expert analysis of legal inquiries, DD, legal opinions…

Our clients are plant operators, utilities, project developers, equipment manufacturers, energy traders, agricultural companies and financing banks.

Facts:

founded in 2012

highly specialized

10 Lawyers

Seated in Berlin

About us…

Dr. Hartwig von Bredow – Intersolar Europe Webinar - 13 February 2019 2

Dr. Hartwig von Bredow Attorney-at-law (Rechtsanwalt)

In the field of PV projects

...we advise manufacturers, project developers, operators and utility companies on all legal issues

concerning PV projects.

...we review and develop new business models together with our customers.

...we review, develop, draft and negotiate all relevant contracts (EPC Contracts, Operation & Maintenance

Contracts, Power Purchase and Trading Agreements, etc.).

...we help to ensure grid access and the financial support (feed-in tariffs & auctions)


Overview


General remarks Auctions Legal questions

Renewable Energy Sources Act (EEG 2017) grants

R Priority grid access and compensation in case of curtail of feed-in

R Feed-in tariffs / market premium for 20 years guaranteed

Mandatory market premium model since 2014

Tenders for all renewable energy sources since 2017

R Statutory feed-in tariffs only for small installations

R Pilot tenders for solar installations started in 2015


Financial support for PV in Germany

Obligation to report to Federal Grid Agency (Bundesnetzagentur)

Obligation to market the electricity directly for installations with more than 100 kW installed power

Technical requirements: devices that allow the grid system operator and the direct seller to

R call up the current level of feed-in

R reduce feed-in by remote control

Prohibition of self-supply

R Operators may not use the electricity generated in their installation for self-supply

R Does not apply, among others, to electricity consumed within the installation or when feed-in is reduced due to network congestion


Good to know…

Overview



Subject of the tender is the market premium (“value to be applied”)

R Remuneration for electricity fed into the grid

R Guaranteed for 20 years

The bid is submitted for a concrete project. However, award can be referred to other areas (premium reduced by 0.3 ct/kWh)

Pay-as-bid tender (no uniform pricing)

Maximum value: 8.91 ct/kWh, lowest bids will be awarded

Time limit for realisation: 18 months (after: reduced by 0.3 ct/kWh) or 24 months


Main aspects

Executing agency for all auctions: Federal Network Agency

Watch out: strictly formal procedure

R The forms published by the Federal Network Agency must be used

R It seems rather simple, but errors will lead to definite exclusion from tender

R Several court proceedings are pending

Formal requirement for the bids

R declaration of bidder that he owns the site or has the approval of the owner

R Copy of the decision on the establishment / amendment of the land-use plan, copy of the

disclosure decision, copy of the adopted land-use plan

R No copy of the cadastral exert required


Fromal Procedure


Overview of the auction procedure

First securityand fees

Second securityand fees

Announcementof the auction

Bid deadlines Awards

Commissioningand application

for paymentauthorisation

5 to 8 weeks Few days 10 days 18 months (max. 24 months)

Obligation to participate for all PV installations with an installed capacity of more than

750 kWp

R ground-mounted PV installations as well as for roof-top installations

R Minimum size of installation: 750 kWp

R Maximum size of installation: 10 MWp

Only certain places of installation (e.g. buildings, conversation areas, etc.) are eligible


Size and place of installation

Securities

R First security: 5 Euros per kW (to be paid upon bidding)

R Second security: 45 Euros per kW

to be paid at the latest on the tenth working day following the public announcement of the award

only 20 Euros per kW if a land-use plan has already been adopted or a planning approval decision exists

Instead of payment deposit of a security / bailment is also possible


Securities

Overview



Who am I, and if so how many?

Sect. 3 n° 1

“installation” shall mean every facility to generate electricity from renewable energy sources or from mine gas; whereas

in case of solar power installations each module is considered a separate installation; ....”


The definition of an installation

Sec. 24 RESA 2017

(1) Several installations shall …. be regarded as one installation if

1. they are located … in the immediate vicinity, …

4. they have commenced operations within twelve consecutive calendar months.

… In derogation of sentence 1, ground-mounted installations shall not be counted together with solar installations in or on buildings and noise protection walls.

(2) Without prejudice to subsection 1 sentence 1, several ground-mounted installations shall … be deemed equivalent to one installation if they

1. have been constructed within the same municipality ….and

2. have been commissioned within twenty-four consecutive calendar months, spaced up to a linear distance of two kilometres apart measured from the outside edge of the respective installation.


Several installations (1/3)



749,99 kWp 500 kWp

Installation N° 1 = statutory feed-in tariff (without tender)

Installation N° 2 =- no statutory feed-in tariff (as its installed capacity is considered to be more than 750 kWp)- no tender (as tenders are open only to installation with more than 750 kWp) à no financial support at all

Immediate vicinity / same municipalityand 2 km

Commissioningwithin 12 / 24 months



749,99 kWp

1.000 kWp

Installation N° 1 = statutory feed-in tariff (without tender)

Installation N° 2 =- no statutory feed-in tariff (as its installed capacity is considered to be more than 750 kWp)- Admissable for tender

Immediate vicinity / same municipalityand 2 km

Commissioningwithin 12 / 24 months

Littenstraße 10510179 Berlin

T: +49-30-8092482-20F: +49-30-8092482-30

[email protected] www.vonbredow-valentin-herz.de

www.twitter.com/EE_Recht

Dr. Hartwig von Bredow

mailto:[email protected]

••

Large-scale PV-installations

eligible areas, aspects of construction law

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Overview

I. Areas eligible for financial support

II. Area-related restrictions for installations without financial support

III. Large scale PV-installations and construction law

IV. Some practical advice

13.02.2019 Large-scale PV-installations 2Margarete von Oppen, [email protected] www.asd-law.com

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I. Areas eligible for financial support

The realization of large scale pv-installations under the EEG support schemes

requires construction on specific sites.

1. Background

2. Categorization

3. Examples of areas

4. Specific land area categories in case of tender

3Margarete von Oppen, [email protected] www.asd-law.com

13.02.2019 Large-scale PV-installations

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I.1. Background

Land use conflicts between renewable energy installations and environmental

protection

Prioritization of PV-installations on rooftops as already sealed areas (unlike wind

turbines)

Concentration of ground-mounted PV-installations on areas of “inferior

environmental” quality



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I.2. Categorization

The areas deemed of “inferior environmental quality” were determined in a political process (7

for installations up to 750 kWp; 10 for pv installations with compulsory tendering process). So

it´s not about logic.

Nonetheless, it´s possible to classify the areas according to certain characteristics.

a. Constructions other than buildings (no formal planning, e.g. zoning plan)

b. Only formal planning

Zoning plan prior to September 2003

Zoning plan prior to January 2010 for commercial or industrial purposes

Area subject of a plan approval procedure (= complex administrative procedure)

c. Zoning plan + soil of minor quality

Conversion area (economic, military, residential construction, traffic construction)

Areas along a highway or a railway

Sealed



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I.3. Examples of areas - 1

Constructions other than buildings (e.g. landfill site, gravel pits)



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Zoning-plan for business parks and industrial estates

(GE/GI)



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Area in a corridor of 110 m along a motorway or railway track



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I.4. Specific land area categories in case of tender (1)

Larger variety of eligible areas in case of tender; zoning plan + specific area

Areas owned by the Federal Republic or the Federal Authority for Real Property

Administration (Bundesanstalt für Immobilienaufgaben = BIMA), which have

been managed by BIMA after 31.12.2013 and have been published on the

BIMA-Website for solar purposes (https://www.bundesimmobilien.de)

Plots of land in less-favoured areas according to European agricultural law,

under the following conditions

The land was grassland at the time the development of the zoning plan was

approved by the competent community or

The land was farmland at the time the development of the zoning plan was

approved by the competent community and

The respective federal state adopted a regulation according to that the federal

state opens tenders for the aforementioned areas



https://www.bundesimmobilien.de/

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I.4. Specific land area categories in case of tender (2)



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II. Area-related restrictions for installations without financial support

The existence of a support scheme does not exclude the installation of pv-plants

without support.

High spot market prices for electricity and low tender outcomes have fuelled

a hyped discussion in Germany right now.

In principle free choice of area for construction.

Nevertheless legal limitations come from building – and environmental law.

See III



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III. Large-scale installations and building law

1. Concept of plant permit in Germany

2. Area with zoning plan

3. Area without zoning plan

4. Development of a zoning plan

5. Duration of the procedures



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III.1. Concept of plant permit in Germany

Principle. Construction of a Large scale pv-installations requires a building permit (unlike

roof-top installations)

Conditions for authorization. A building permit has to be granted if there is no conflict with

the applicable public law.

Relevant public law provisions are mainly

o Planning regulations

o Environmental law

o Conservation law



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III.2. Area with zoning plan

1. Specific zoning plan for solar installations: The permit has to be granted

2. Unspecific zoning plan, e.g. zoning plan for business parks or industrial estates.

Depends on the stipulations of the plan. Often, it’s necessary to ask for exemptions.



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III.3. Area without zoning plan

1.Premise. Large scale pv-installations are to built in exterior areas in the sense of the

German Building Code, not in the cities

2.Theory. There are stipulations in the German Building Code that allow under certain

conditions constructions in exterior areas (e.g. must not be in conflict with the landscape)

3.Practice. Large scale pv-installations are in general too big. Therefore most communities or

districts see a so called “planning requirement” independent of a support scheme.



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III.4. Development of a zoning plan

1. Convince the competent authority (municipality/municipal council)

2. Municipal council approves the development of a zoning plan

3. Regional planning has to be observed (sometimes relevant restrictions)

4. Two phases of participation of the public

5. Two phases of participation of the relevant public authorities

6. Administration prepares the zoning plan and tries to balance the different

interests

7. Municipal council approves the zoning plan



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III.5. Duration of the procedures

1. Zoning plan. Quick: under 6 month; long: up to 18 months

2. Permit. Regularly under 3 months; often quicker, sometimes longer



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Thank you for your attention!

Margarete von Oppen [email protected]


New Market Perspectives for large-scale PV Installations ...

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