German Offshore Wind Farm Owners to Get Compensated for Delays

Germany’s government agreed to a framework to compensate wind farm operators for delays connecting offshore developments to the power grid.

“With the planned liability arrangement we provide wind park investors and grid operators with the necessary security needed for the further development of offshore wind power,” Environment Minister Peter Altmaier said in a statement today.

The draft bill will be presented in summer and enter into force as soon as possible, according to the statement issued jointly by the environment and economics ministries. There will be a ceiling for costs transmission system operators can bear, with additional expenses passed on to consumers except in cases of severe negligence, according to the statement.

EON AG (EOAN) and RWE AG (RWE), the country’s biggest utilities, have threatened to halt investment in wind projects unless obstacles are removed, which RWE blames mainly on slow permitting and problems with acquiring cables and transformer stations. Chancellor Angela Merkel’s government is targeting 10 gigawatts of offshore wind by 2020 to replace nuclear reactors.

RWE Innogy, RWE’s renewables unit, welcomed the announcement, spokesman Konrad Boecker said by e-mail. The company will wait for further details of the announcement.

North Sea

Grid operator TenneT TSO GmbH has told the unit of Germany’s second-largest utility it doesn’t know when it will be able to connect the 1 billion-euro ($1.25 billion) North Sea East wind project to the German grid because of technical issues.

The legislation is probably the “most awaited piece of legislation by the offshore wind industry in Germany,” Anna Czajkowska, an analyst at Bloomberg New Energy Finance, said in an e-mail. Many projects face delays caused by connection problems and new wind farms are unable to get finance until the liability issue is regulated, she said.

“Implementation of this proposed legislation basically determines whether Germany meets-or-misses its 2020 renewable energy target, as 10 gigawatts of offshore wind is needed to meet it,” Czajkowska said.

To contact the reporter on this story: Tino Andresen in Dusseldorf at tandresen1@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.