The German Renewable Energy Act (Erneuerbare-Energien-Gesetz 2017 – "EEG") contains a strict system of time limits within which renewable energy plants must be realised to avoid penalties for plant operators under the applicable tariff regime. The COVID-19 pandemic is increasingly jeopardising the realisation of renewables projects in Germany, so that many plant operators are now faced with the risk of delays in the realisation of their projects and, as a consequence, potential penalty payment obligations.
The Federal Network Agency (Bundesnetzagentur – "BNetzA") has now reacted and announced that it will be easing its enforcement practice, in particular by extending realisation deadlines and avoiding penalties.
Background
Under the EEG, developers of renewable energy plants are generally obliged to participate in public tender procedures (auctions) for the tariffs (reference price) in order to receive a remuneration for biomass, offshore and onshore wind and solar plants.After every individual tender procedure, the BNetzA is obliged to announce the results of the tender procedure by providing certain, statutorily-defined information on its website, e.g. the names of the awarded bidders including information on the location of awarded plant, the lowest and highest bid values which have been awarded, and the average weighted bid value ("public announcement"). Moreover, the BNetzA informs all awarded bidders separately, which usually happens within 2-4 weeks after a bid date.
The public announcement has important legal impacts for the further development of the renewable project, in particular:
- Start of the realisation deadline: The renewable energy plant must be commissioned within a certain time period stipulated in the law (e.g. 24 months for biomass plants). This realisation period starts with the date of the public announcement of the award.
- Expiry and cancellation of the award: An award expires to the extent the awarded plant has not been commissioned within the realisation deadline.
- Penalties: Operators of new built renewable plants who received an award in the tender procedures must pay certain penalties if, inter alia, the respective renewable energy plant has not been commissioned within a certain time period after the public announcement of the award.
Activity of the BNetzA
The BNetzA has now published a new enforcement practice on its website, with which it intends to react to COVID-19-related delays in the realisation of renewable energy projects. This new practice concerns tender procedures that have either already been carried out or that are currently ongoing, and any upcoming tenders. Moreover, plant operators that have already been awarded as well as potential new bidders are affected by these measures. In detail:
1. Bid dates
The bid dates of the tender procedures will take place as stipulated by law. The EEG shall – at the current stage – not be adjusted. Thus, potential bidders must submit their bids duly on time.
2. Delay in the tender procedure
The BNetzA will conduct the tender procedures as usual, i.e. it will open, review and rank the bids in the usual order. However, this can probably only be carried out with a certain time delay, as the opening and review process will require a high level of personnel and the presence of several people in one room.
3. No public announcement of the award decision
The most important modification announced by the BNetzA is that the award decision itself will not be publicly announced on the website for the moment. Without such a public announcement, the realisation period will not start. The public announcement will only be made once the current situation has stabilised again. An exception applies to “existing biomass plants which have already received an award” (bezuschlagte Biomass-Bestandsanlagen).
4. Publications of certain tender procedure details
Even though the BNetzA will not announce the award decisions, the BNetzA will, nevertheless, publish certain details of the completed tender procedures. In particular, the figures on the quantity of bids and the highest and lowest value of the bids awarded will be published by the BNetzA.
5. Extension of realization deadlines
For onshore wind energy plants and biomass plants, the BNetzA has announced that it will grant an extension of the realisation deadlines upon informal application (e.g. by email explaining the reasons for delay) in an unbureaucratic way. As a general rule, the realisation deadlines can only be extended under further conditions defined in the law, i.e. if a legal claim has been filed against the plant's permit by a third party and the immediate enforceability of the permit has been imposed by the competent permitting authority or by a court. The now announced possibility to grant such extensions also in the case of COVID-19-related delays represents a significant improvement for the plant operators.
6. Avoiding of penalties
Operators of onshore wind energy plants and biomass plants whose realisation deadlines have been extended (5.) shall not pay penalties. Usually, penalties are due after the original realisation period has expired, irrespective of the extension of the period. However, the imposition of penalties by the transmission system operator (TSO) requires that the BNetzA makes appropriate notifications to the TSO. BNetzA will, however, refrain from doing so in the case of plants whose realisation period has been extended due to COVID-19-related delays, so that in practice no penalties can be imposed.
