Move towards reverse auction from feed-in tariff policy for renewable energy - German case


#climate change #energy #renewable energy

Three years ago the German Government decided to move from feed-in tariff policy for renewable energy towards a reverse auction approach in order to foster efficiency. It created lots of concerns particularly from proponents and advocates of community energy projects, which number well over 1,000 across Germany.

Auction processes are highly competitive to maximize economic performance, while initiatives by communities, small businesses and farmers are typically collaborative, based on local social and environmental values and value. Therefore it was not without struggle that community stakeholders in Germany saw their needs finally reflected in the new policy framework, including exemptions for smaller wind energy projects owned by local citizens to simplify the initial planning process and in particular minimised the risk of community actors bearing high up-front costs associated with the planning process, without guarantee of success in the auction process.

This resulted in a high competition in the auction. After five years of policy development and tendering, surprisingly, the majority of bids were awarded to citizen-owned energy projects.

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