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Germany to phase out fixed feed-in tariffs for new renewables
The overhaul would shift support toward projects that better match electricity demand and avoid worsening grid congestion, with the state spending about €16 billion on renewables this year.
Germany plans to overhaul its renewable-energy funding rules, cutting back subsidy support and phasing out fixed feed-in tariffs for new installations starting in 2027, according to a draft law published by the Economy Ministry late on Friday. The changes aim to direct support toward renewable projects that respond more closely to electricity demand and do not increase grid congestion, as surging solar output strains the power network. Bloomberg and SCMP Economy report that the proposal would gradually remove fixed feed-in tariffs that are generally granted for 20 years. The plan also comes as power prices have increasingly turned negative, a dynamic that could make it harder for developers of onshore wind and solar to invest, since costs are higher and revenues are falling. Despite the expected investment slowdown risk, the ministry said it is maintaining its target of raising renewables’ share of Germany’s gross electricity consumption to 80 percent from about 58 percent by 2030, and it plans additional auctions for wind capacity. The country has seen record renewable expansion in part due to feed-in tariffs and efforts to reduce permitting and other red tape, but power lines have not kept up, forcing operators to curtail generation. The draft law and broader spending debate also reflect mounting fiscal pressure. The state is expected to spend about €16 billion on renewable support this year, and Bloomberg reports that additional compensation for curtailed generation could add as much as €3 billion, drawing criticism as Chancellor Friedrich Merz’s government seeks to rein in spending. Producers can claim compensation for lost output when generation is curtailed.