Driver of the energy transition: The EEG celebrates its 25th birthday

The Renewable Energy Sources Act (Erneuerbare-Energien-Gesetz, EEG) was only five pages long when it appeared in the Federal Law Gazette on March 29, 2000 shortly after being passed by the Bundestag and came into force on April 1. Its many opponents would have liked to dismiss it as an April Fool's joke, but it laid the foundations for the expansion of renewable energies in Germany. Wind and solar energy in particular have experienced an enormous upswing as a result of the EEG and have become mainstream for many. "The share of renewable energies in electricity generation has grown from just under six percent to almost 60 percent – in the past 25 years", says Simone Peter, President of the German Renewable Energy Federation (Bundesverband Erneuerbare Energie, BEE). Between 2019 and 2024 alone, the additional expansion of wind and solar energy saved Germany 12.5 billion euros in costs for gas and coal imports in the electricity sector, according to the Ember Electricity Review.

The Greens led by energy transition pioneer Hans-Josef Fell and the SPD led by Hermann Scheer launched the EEG over a quarter of a century ago. The red-green coalition under Gerhard Schröder (SPD) passed it after the turn of the millennium, replacing the Electricity Feed-in Act. The EEG essentially regulates the preferential feed-in of electricity from renewable sources into the grid and guarantees fixed feed-in tariffs for producers. Initially, these were between 6.19 and 9.10 cents/kWh for electricity from wind energy and at least 50.6 cents/kWh for photovoltaic systems (PV). They were initially financed via the EEG surcharge, i.e. the electricity price. Since 2022, the EEG costs have been financed from the federal budget. The law also sets clear expansion targets: around 80 percent renewable electricity by 2030, ideally 100 percent by 2035.

Renewables now account for 55% of electricity consumption in Germany. Wind power has become the most important source of energy for electricity generation in this country. At EU level, electricity generation from solar power has already overtaken that from coal. The number of jobs in the renewables sector has risen sharply and has reached almost 400,000, according to the BEE. It is worth noting that many of these jobs are located away from the major cities, thus bringing an economic upturn to rural areas. In general, the costs for renewables have fallen significantly as a result of the EEG, which has increased their competitiveness. Germany is considered a pioneer in this area in the EU. Internationally, however, China in particular has made massive gains in this area in recent years.

Fervent appeal to the new German government

The EEG proponents did not have it easy: "The energy transition was fought to the death by obstructionists such as Rainer Brüderle (FDP), Philipp Rösler (FDP), Sigmar Gabriel (SPD), Brigitte Zypries (SPD) and Peter Altmaier (CDU)," according to the photovoltaics portal. Wolfgang Clement (SPD), the Federal Minister of Economics at the time of the EEG's birth, was also an "avowed lobbyist for the coal companies". Opponents often argue that the law leads to high electricity prices and that the subsidies are a waste of taxpayers' money. The "disfigurement" of the landscape continues to be cited, as does the fluctuating feed-in of wind and solar power, which jeopardizes the stability of the electricity grid. However, many of the objections have been refuted and the long-term benefits of renewables are considered stronger.

Over the years, legislators have amended the EEG several times in response to changing conditions and new challenges. The law has undergone eight major amendments, which have been subject to renewed debate. At the end of 2020 , the Bundestag set annual tender volumes of between 2.9 and 5.8 gigawatts (GW) for onshore wind and between 1.9 and 2 GW for PV. The installed capacity of onshore wind is set to increase from 54 GW to 71 GW by 2030, and that of PV from 52 GW to 100 GW. There are more incentives for tenant electricity and balcony power plants. Most recently, the Federal Council passed the Solar Peak Act in mid-February: Operators of new solar systems will no longer receive feed-in tariffs when electricity prices are negative and smart meters will become more expensive for users. The main aim is to smooth out temporary electricity surpluses. Numerous environmental associations are calling for a clear commitment to the "further environmentally friendly expansion of renewables" and models to promote social acceptance and participation from the planned new black-red federal government.

(mki)