Germany’s upper house of parliament Friday passed an ambitious renewable energy law which aims to mitigate the effects of the country’s move away from nuclear and fossil-fuel generated power.
The upper house, which represents Germany’s 16 states and which could have delayed the bill, passed the bill ending months of tough negotiations. And the reform of the renewable energy law can come into force as planned on August 1.
The green light was given after the European Commission on Wednesday said it had ended a probe into Germany’s legislation and gave backing to the plans after Berlin agreed to make some amendments to the law which had initially sparked a war of words between Berlin and Brussels.
The government said the bill is necessary to deal with the undesired side-effects of its flagship project which aims to replace nuclear power with renewables over the next eight years and most fossil fuels by the midcentury. The policy known as “energy transformation” has resulted in a green energy production boom, but has also pushed up power prices for consumers and many businesses. Companies have complained rising power prices would hurt Germany’s industrial base.
The imminent law trims subsidies for new green power plants, which range from vast wind farms to small solar panels installed on private roofs. It also spreads the power-price surcharge which has funded these subsidies more equally among businesses. Many companies had previously been exempt because they operate in energy hungry industries or decided to build their own power plants.
The EU had concerns that some German firms producing renewable energy may have benefited unfairly from subsidies in the past. It also said a surcharge imposed on imported electricity equated to a customs duty and violated the bloc’s internal market rules.
In response to the criticism, Germany agreed earlier this week to allow foreign firms that import renewable energy to enjoy the same conditions as Germany-based companies that produce energy domestically.
German companies which generate power will now have to contribute toward a fund that subsidizes renewables and 350 companies will pay back a combined €30 million ($40.8 million) for what the commission considers unfair aid they received in 2013 and 2014.