German renewables chief dissects controversial grid and auction reforms

Ian Griggs (0:03)

Welcome to the Windpower Podcast with me, Ian Griggs, editor of Windpower Monthly. In a special episode of the Windpower Podcast to mark next week's WindEnergy Hamburg Conference, for which Windpower Monthly is the official podcast partner, I spoke to Bärbel Heidebroek, president of Germany's Wind Energy Association, BWE. We spoke about the German government's controversial proposals to reform its onshore and offshore wind power sectors, as well as the recent electoral success of the German far-right party, the AfD, in the state of Saxony-Anhalt, and what that might mean for future and even existing wind deployment there and elsewhere in the country.

I began by asking her whether the proposed reforms would undo Germany's recent successes in the deployment of onshore wind.

Bärbel Heidebroek (0:56)

Hello, nice to see you.

Ian Griggs (0:57)

Hello, nice to see you too. Bärbel, we're going to talk about various aspects of what the German government is trying to do in terms of reforming the wind energy sector in the country. We're going to start with the onshore wind sector. I'm just going to give our listeners a little bit of context. The reforms that the German government is proposing include measures that will curtail renewable power projects like wind farms and cut compensation for doing so in capacity-limited grid bottleneck areas in an effort to free up grid connection space.

They're also proposing blanket power limits on wind and solar projects with wind turbines limited to a specific power rating of 280 watts per square meter.

Grid operators under these proposals would be given the authority to designate grid bottleneck areas and they would longer prioritize renewables for grid connection in these areas. So that's a flavor of the reforms that the German government is proposing for onshore wind. Let me just ask you this, Germany's onshore wind deployment has been the success story of Europe doing better than everybody else in Europe by a country mile. Are the German government's reforms about to undo all of this good work, in your opinion?

Bärbel Heidebroek (2:19)

No, I think they don't want to undo all this work, but we have the problem that the grids weren't built out and digitalized as quick as they should have been. And now we really have the grids as a bottleneck. We have to admit that, but we see other solutions to the problem. We think they should implement more flexibilities like batteries, like electricity, and so on, and not restrict complete areas. If they say that they won't pay the re-dispatch costs anymore, that would mean that we wouldn't establish wind farms in these areas.

Ian Griggs (2:57)

Do you think these reforms could either threaten or even at the worst, collapse renewables investments in the country?

Bärbel Heidebroek (3:06)

Yes, there was a big uncertainty for nearly a year now, because the first draft of the WITS package was leaked. And since January, we have been discussing all these issues. And if nobody knows what will come out of all these legislations, so there is an uncertainty to invest in projects, of course.

Ian Griggs (3:26)

And of course, investors, that's the thing that they hate the most, isn't it? Uncertainty, right?

Bärbel Heidebroek (3:29)

Yes, yes. And now they are just like paralyzed and wait, what will come out of these laws.

Ian Griggs (3:35)

So it sounds to me like it is threatening investment, or at least, as you quite rightly put it, paralyzing it. In your opinion, which companies could be the hardest hit by these reforms? Are there some which are better able to shoulder the impact than others?

Bärbel Heidebroek (3:50)

No, I don't think so. I think it will affect the whole renewable sector. It will affect those who plan the projects, who do the work, do the planning.

And in the longer run, of course, it will affect the OEMs and it will affect the suppliers to the OEMs. And that's really crucial because the suppliers are the same who supply the automotive sector, which is as well struggling, as we all know. So I think you will see all this damage, not right now, but maybe in a year or two, because we have so many permits right now, and everybody will try to build these farms. And then after that, we will see the effects.

Ian Griggs (4:30)

Right. Basically, you're telling me, really, everybody in the renewable energy sector is going to be badly hit.

How does the government's rationale about these reforms cutting costs actually hold up? You said actually that the costs of the sector will come in maybe after about a year or so, but is the government guilty of short-term thinking?

Bärbel Heidebroek (4:51)

Well, I think it isn't that easy, because of course, they see the problems, and they want to kind of protect the grid operators, because they are really behind, and they have to build out the grids much faster. So they try to heal one problem causing another problem, because now it feels for us that we have to pay the rent for the grid operators didn't do their work properly.