The Crash of a Policy Pilot to Legally Define Community Energy. Evidence from the German Auction Scheme

Abstract

“Community energy” is a highly contested issue not only in the German energy transition governance but also in the recent legislative procedure to recast energy market legislation within the EU’s “Winter Package”. This paper analyses the effects of the privileges for “community energy actors” in the German auction scheme for on-shore wind energy. Those privileges aim to guarantee a level playing field for small actors and to enhance societal acceptance. The results of the first rounds of auctions did not merely reveal an acceptable level of losses due to recognized trade-offs between policy objectives. Instead, the results indicate a complete failure regarding all three objectives of the revised support scheme for renewables—controlled renewable energy expansion, actor plurality and cost efficiency. The paper discusses whether the policy motivations translate appropriately into legislation. It suggests differentiating clearly the economic risks for small actors from the added value that is attributed to community energy actors. De-coupling these—often mixed—motives behind the demands for actor plurality unveils policy approaches that more adequately fit with these distinct motives. The paper finally proposes rather to integrate the politically desired values into the bid evaluation criteria instead of granting privileges to specific actors that are assumed to provide these values.

Germany: from feed-in-tariffs to auctions and the question of diverse actors

“…It is feared that with the conversion of a regime with fixed feed-in tariffs to an auction based system the financially strong supra-regional providers will have improved opportunities to increase their market share. The results of the pilot bidding rounds on ground mounted PV (2014-2016) verified the concerns regarding a decline in the diversity of actors and the exclusion of small players (Tews 2018). For decentralised, small projects with local character, the amendment constitutes a much bigger challenge (EnKlip 2015; Leuphana Universität of Lüneburg & Nestle 2014;BNetzA 2015).…”

“…It is assumed that participation in citizen energy projects increases not only local acceptance of renewable energy plants, but also the experience of selfefficacy as well as social inclusion of vulnerable people (Tews 2018). However, acceptance depends on whether the implementation of the projects correspond with the ideas of citizens about democratic decision-making processes, transparency and participation, sufficient decision options, an inclusive planning culture, and an adequate distribution of costs and benefits (Mono 2013;Bauknecht, Vogel & Funcke 2015;Schweizer et al 2014; 100 prozent erneuerbar stiftung 2012; Bovet & Lienhoop 2015).…”

“…Without this acceptance, the expansion of wind energy cannot be achieved in the planned amount' (Deutscher Bundestag 2016, author's translation). Nevertheless, many scientists and practical actors consider the new funding regime a serious threat to the continued commitment of the small, local and civic actors (Niederberger & Wassermann 2015;Tews 2018). It is feared that competition decreases and the plurality of actors cannot be obtained in the renewable energy market, because:…”

“…The bidders made use of the specific rules for citizen energy: they could take part in the bidding procedure without having a construction permit, and could make use of the longer time span between awards and realisation of the project deadline (up to 4 to 5 years). However, it turned out that the successful bidders, privileged as citizens' energy companies, were set up by a small number of professional project developers, contractors or service providers (Tews 2018). They transformed their projects and found constructions that made them look like citizens' energy projects because they were adapted to the official rules of citizen energy.…”

Conditions Enhancing the Socially Inclusive and Environmentally Sound Uptake of Wind Energy : The Case of Germany

“…The Act also granted them a longer implementation period. Those privileges aimed to guarantee a level playing field for small actors and to enhance societal acceptance (Tews, 2018). To benefit from those privileges, community/citizens´ energy companies had to comply with certain eligibility criteria, e.g.…”