Expert view | Development of renewable energies in Germany: how GEM is a vital player for Post EEG deals

The new German Renewable Energy Act "Erneuerbare-Energien-Gesetz" (EEG) came into force in January 2021, putting an end to state subsidies for renewable energy assets such as solar and wind power. What impact will this change have on these assets ? The answer does lie with ENGIE’s Business Unit “Global Energy Management” (GEM), and its proven PPAs mastering.
Green stakes for German Market (Post EEG) | ENGIE Global Energy Management

2021, new challenges for EEG assets

This new EEG law creates the legal conditions for all produced and consumed electricity in Germany to be carbon neutral from 2050, with the intermediate target of 65% share of renewable energies in the gross electricity consumption in Germany by 2030.

The priority will be given to the development of intermittent energies, like wind and solar.

Added to these new conditions, the subsidies from the first EEG assets came to an end, with consequence of renewable energies asset productions without the price guarantee factor. The first generations of wind and solar asset constructions in the country built by the pioneers of renewable energy in Europe are faced out of the subsidy scheme.

The raising question is what to do with the produced renewable energy then. And more particularly, are we allowed to purchase the power production from these renewable assets, for our customer portfolio.

A new mechanism is appearing here, with now non-subsidies assets being confronted with market risk exposure for the first time in the life time. Clearly it is a new situation where a lot of learning on the table.

This is where pioneers in risk management and market access, like Global Energy Management (GEM), intervene, to propose legitimate and proven solutions to the market.

 

GEM, one of the largest PPA providers in Germany

Indeed, in a very swift time lapse before the end of 2021, the GEM team successfully onboarded Post EEG assets of 270MW and steadily growing in order to keep the assets on the market. Even  in the on-going year 2021 we are a reliable partner for our operators. Besides that we are actively managing 3.500 MW under the regime of direct marketing.

As the midstreamer of the Group, GEM has a central and connecting role between the renewable production industry and the consumers within the energy market. Our teams purchase future renewable production, and manage mismatches in volume.  Relying on its expertise, GEM takes over all the risk related to market movements and intermittency as a buyer of pay as produced generation profiles. As a consequence our clients can focus on their own core business.

Knowing that operators have different needs and risk profiles, we offer flexible solutions, such as contractual concepts for repowering processes or active price risk management via fixing of tranches or a pure spot indexation. .

Post EEG Power Purchase Agreements (PPAs) are only one product we offer to our clients in Germany next to long term PPAs -for instance, the Energiekontor deal- and our decent position in the direct marketing market. It fits perfectly to our own zero emissions strategy and our ambition to empower our downstream clients on their way to zero carbon, as well as to find custom made solutions for our upstream customers. 

The German market situation is an obvious example of what our teams can carry out related to renewable energies projects.

By integrating the assets into renewable supply contracts towards industrial and reseller customers (such as Stadtwerke), promoting a transition towards carbon-neutrality, and creating customer added value on the upstream/ downstream sides and reliable customer relationships, GEM proves to be one of the biggest Post EEG PPAs provider in Germany.

 

Testimonies – Our teams act to be #GreenerTogether

Green stakes for German Market (Post EEG) | ENGIE Global Energy Management

Green stakes for German Market (Post EEG) | ENGIE Global Energy Management

Green stakes for German Market (Post EEG) | ENGIE Global Energy Management