New EEG sites should qualify for GOOs: BDI

Market: Electricity
12/03/21

German industry federation BDI has called for new renewable power sites subsidised under the country's renewable energies law (EEG), to equally qualify for guarantees of origin (GOO).

The demand forms part of a raft of recommendations the BDI published last week and addressed to the next federal government following general elections in September.

Under existing legislation, renewable sites receiving market premiums or feed-in tariffs (FiT) under the EEG cannot generate GOOs. The EEG justifies the "multiple sale ban" as power consumers already pay for the green quality through the EEG levy, which is levied on all non-exempted power consumption. But the BDI argued that since the EEG levy is now part-financed through general taxation, the justification for the ban is losing its stringency.

The economy and energy ministry has pledged to gradually reduce the EEG levy to zero over the next few years, by having it entirely funded through general taxation.

The ministry said this week that it is looking at the multiple sale ban in connection with "electricity labelling issues". Given the "high complexity" of the issue, and the "constitutional questions" it raises, the ministry said that a "deepened analysis" will be necessary, and that any conclusions will be drawn in the next parliamentary period.

A paper published last year by Wurzburg-based environmental and energy law foundation Stiftung Umweltenergierecht (SUER) suggests that generating GOOs for EEG sites could be designed as a voluntary option. Site operators would have their EER remuneration reduced by the market price of the GOO.

Limiting GOOs to new sites under only the EEG would have the advantage of avoiding a "flooding" of the European GOO market — this would be the case if existing sites could qualify, given Germany's large volume of renewable power generation, the paper said.

The EEG levy has been capped at €65/MWh this year — compared with the over €90/MWh it could have reached. The government will plough around €11bn into maintaining the cap in 2021, by pushing proceeds from the new domestic CO2 price in the heating and transport sectors, and from general taxation, into the EEG account.

EEG levy phase-out raises PV investment issues

The economy and energy ministry's plans to gradually push the EEG payments into general taxation will have an impact on investors' motivation, an energy expert warned.

SUER energy law expert Thorsten Mueller said that the high EEG levy has played a big role in incentivising investments in rooftop PV capacities for years, as this would allow companies to at least partially avoid paying the levy, in addition to receiving subsidies in the form of market premiums or FiTs. If the levy is financed through general taxation, part of the incentive will end, and it is unclear what the consequences could be, Mueller said. He suggested that demands by the opposition Green Party, to make rooftop PV mandatory at least on new and public buildings, could to an extent be viewed as a "compensation" for the EEG-levy phase-out, as it could trigger another wave of investment.

But plans to phase out the EEG levy should not be viewed as a sea change, Mueller said — the EEG levy is bound to decline anyway, as older renewables sites with their high FiTs gradually leave the system. But the government would be pulling forward the effect — and significantly so, Mueller said.

By Chloe Jardine

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22/11/24

Cop 29 goes into overtime on finance deadlock

Developing countries' discontent over the climate finance offer is meeting a muted response, writes Caroline Varin Baku, 22 November (Argus) — As the UN Cop 29 climate conference went into overtime, early reactions of consternation towards a new climate finance draft quickly gave way to studious silence, and some new numbers floated by developing nations. Parties are negotiating a new collective quantified goal — or climate finance target — building on the $100bn/yr that developed countries agreed to deliver to developing countries over 2020-25. The updated draft of the new finance goal text — the centrepiece of this Cop — proposes a figure of $250bn/yr by 2035, "from a wide variety of sources, public and private, bilateral and multilateral, including alternative sources". This is the developed country parties' submission, the Cop 29 presidency acknowledged. Developing nations have been waiting for this number for months, and calling on developed economies to come up with one throughout this summit. They rejected the offer instantly. "The [$250bn/yr] offered by developed countries is a spit in the face of vulnerable nations like mine," Panama's lead climate negotiator, Juan Carlos Monterrey Gomez, said. Negotiating group the Alliance of Small Island States called it "a cap that will severely stagnate climate action efforts". The African Group of Negotiators and Colombia called it "unacceptable". This is far off the mark for developing economies, which earlier this week floated numbers of $440bn-600bn/yr for a public finance layer. They also called for $1.3 trillion/yr in total climate finance from developed countries, a sum which the new text instead calls for "all actors" to work toward. China reiterated on 21 November that "the voluntary support" of the global south was not to be counted towards the goal. A UN-mandated expert group indicated that the figure put forward by developed countries "is too low" and not consistent with the Paris Agreement goals. The new finance goal for developing countries, based on components that it covers, should commit developed countries to provide at least $300bn/yr by 2030 and $390bn/yr by 2035, it said. Brazil indicated that it is now pushing for these targets. The final amount for the new finance goal could potentially be around $300bn-350bn/yr, a Somalian delegate told Argus . A goal of $300bn/yr by 2035 is achievable with projected finance, further reforms and shareholder support at multilateral development banks (MDBs), and some growth in bilateral funding, climate think-tank WRI's finance programme director, Melanie Robinson, said. "Going beyond [$300bn/yr] would even be possible if a high proportion of developing countries' share of MDB finance is included," she added. All eyes turn to the EU Unsurprisingly, developed nations offered more muted responses. "It has been a significant lift over the past decade to meet the prior goal [of $100bn/yr]," a senior US official said, and the new goal will require even more ambition and "extraordinary reach". The US has just achieved its target to provide $11bn/yr in climate finance under the Paris climate agreement by 2024. But US climate funding is likely to dry up once president-elect Donald Trump, a climate sceptic who withdrew the US from the Paris accord during his first term, takes office. Norway simply told Argus that the delegation was "happier" with the text. The EU has stayed silent, with all eyes on the bloc as the US' influence wanes. The EU contributed €28.6bn ($29.8bn) in climate finance from public budgets in 2023. Developed nations expressed frustration towards the lack of progress on mitigation — actions to cut greenhouse gas emissions. Mentions of fossil fuels have been removed from new draft texts, including "transitioning away" from fossil fuels. This could still represent a potential red line for them. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Cop: Drafts point to trade-off on finance, fossil fuels

22/11/24

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22/11/24

Cop: Drafts point to trade-off on finance, fossil fuels

Baku, 22 November (Argus) — The new draft on the climate finance goal from the UN Cop 29 climate summit presidency has developed nations contributing $250bn/yr by 2035, while language on fossil fuels has been dropped, indicating work towards a compromise on these two central issues. There is no mention of fossil fuels in either the new draft text on the global stocktake — which follows up the outcome of Cop 28 last year, including "transitioning away" from fossil fuels — or in the new draft for the climate finance goal. Developed countries wanted a reference to moving away from fossil fuels included, indicating that not having one would be a red line. The new draft text on the climate finance goal would mark a substantial compromise for developing countries, with non-profit WRI noting that this is "the bridging text". Parties are negotiating the next iteration of the $100bn/yr that developed countries agreed to deliver to developing nations over 2020-25 — known as the new collective quantified goal (NCQG). The new draft sets out a figure of $250bn/yr by 2035, "from a wide variety of sources, public and private, bilateral and multilateral, including alternative sources". It also notes that developed countries will "take the lead". It sets out that the finance could come from multilateral development banks (MDBs) too. "It has been a significant lift over the past decade to meet the prior, smaller goal... $250bn will require even more ambition and extraordinary reach," a US official said. "This goal will need to be supported by ambitious bilateral action, MDB contributions and efforts to better mobilise private finance, among other critical factors," the official added. India had indicated earlier this week that the country was seeking around $600bn/yr for a public finance layer from developed countries. Developing countries had been asking for $1.3 trillion/yr in climate finance from developed countries, a sum which the new text instead calls for "all actors" to work toward. The draft text acknowledges the need to "enable the scaling up of financing… from all public and private sources" to that figure. On the contributor base — which developed countries have long pushed to expand — the text indicates that climate finance contributions from developing countries could supplement the finance goal. It is unclear how this language will land with developing nations. China yesterday reiterated that "the voluntary support" of the global south is not part of the goal. The global stocktake draft largely focuses on the initiatives set out by the Cop 29 presidency, on enhancing power grids and energy storage, though it does stress the "urgent need for accelerated implementation of domestic mitigation measures". It dropped a previous option, opposed by Saudi Arabia, that mentioned actions aimed at "transitioning away from fossil fuels". Mitigation, or cutting emissions, and climate finance have been the overriding issues at Cop 29. Developing countries have long said they cannot decarbonise or implement an energy transition without adequate finance. Developed countries are calling for substantially stronger global action on emissions reduction. By Georgia Gratton and Prethika Nair Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Japan’s Taketoyo to resume biomass co-firing in 2027

22/11/24

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22/11/24

Japan’s Taketoyo to resume biomass co-firing in 2027

Tokyo, 22 November (Argus) — Japan's largest electricity producer Jera aims to resume coal and biomass co-firing at the 1.1GW Taketoyo plant in 2027's first quarter, after a fire halted plant operations in January. Jera announced on 22 November that the thermal power plant in central Japan's Aichi prefecture would resume co-firing wood pellets with coal at a rate of 8pc, around the end of the 2026-27 fiscal year ending in March. This will come after its safety measures are completed. The plant's co-firing rate was 17pc before the serious fire, which was caused by an explosion of dust from wood pellets. The company will consider increasing the co-firing rate again in the future, provided safety can be ensured. But the plant will restart coal-only combustion in early January 2025, operating mainly during the summer and winter seasons, when electricity demand is high. Jera will keep operation rates low at Taketoyo and other coal-fired plants when electricity demand is low and rely more on gas-fired generation, to achieve its initial plan to cut CO2 emissions through co-firing at Taketoyo. Taketoyo started co-firing operations in August 2022 and burned around 500,000 t/yr of wood pellets imported from the US and Vietnam. It will burn 200,000 t/yr after it resumes co-firing at 8pc. The plant will slow down the speed of wood pellet conveyors to reduce friction as a part of safety measures, which means it must also reduce its coal and biomass co-firing rate. It is also currently working on other safety measures, such as installing air pressure conveying facilities dedicated to wood pellets and explosion suppressor systems to inject fire extinguishing agents. The outage at Taketoyo has encouraged Jera to boost replacement gas-fired generation, with the extra gas-fired costs accounting for most of the estimated cost resulting from the shutdown, which could be tens of billion yen in the 2024-25 fiscal year ending in March. By Takeshi Maeda Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Cop: Talks in Baku torn between mitigation and finance

21/11/24

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21/11/24

Cop: Talks in Baku torn between mitigation and finance

Edinburgh, 21 November (Argus) — Developing and developed nations remain at loggerheads on what progress on climate finance and mitigation — actions to cut greenhouse gas emissions — should look like at the UN Cop 29 climate summit. But Cop 30 host Brazil has reminded parties that they need to stick to the brief, which is finance for developing countries. Concluding a plenary where parties, developed and developing, listed grievances, environment minister Marina Silva recognised "the excellent progress achieved" on mitigation at Cop 28. She listed paragraphs of the Cop 28 deal, including the energy package and its historic call to transition away from fossil fuels in energy systems. "We are on the right track," she said, talking about mitigation, but "our greatest obligation at this moment is to make progress with regard to financing". "This is the core of financing that will pave our collective path in ambition and implementation at Cop 30," Silva said, adding that $1.3 trillion for developing countries should be "the guiding star of this Cop". Parties are negotiating a new collective quantified goal (NCQG) — a new climate finance target — building on the $100bn/yr that developed countries agreed to deliver to developing countries over 2020-25. But developed countries insist that a precise number for a goal can only be produced if there is progress on mitigation and financing structure for the NCQG. "Otherwise you have a shopping basket but you don't know what's in there," EU energy commissioner Wopke Hoekstra said. Some developing nations said they need the "headline number first". Some developing countries, including Latin American and African nations as well as island states, have also complained about the lack of mitigation ambition. Cop is facing one of the "weakest mitigation texts we have ever seen," Panama said. But they also indicated that financial support was missing to implement action. Developed countries at Cop 29 seek the implementation of the energy pledges made last year. "What we had on our agenda was not just to restate the [Cop 28] consensus but actually to enhance and to operationalise that," but the text goes in the opposite direction, Hoekstra said, talking about the latest draft on finance. Whether hints that Brazil has mitigation in focus for next year's summit will be enough to assuage concerns from developed countries at Cop 29 on fossil fuel ambitions remains to be seen. The communique of the G20, which the country hosted, does not explicitly mention the goal to transition away from fossil fuels either. The developed countries' mitigation stance grew firmer after talks on a work programme dedicated to mitigation, the obvious channel for fossil fuel language, was rescued from the brink of collapse last week. Discussions have stalled, but another text — the UAE dialogue which is meant to track progress on the outcomes of Cop 28 — still has options referring to fossil fuels. But in these negotiations too, divisions remain. "The UAE dialogue contains some positive optional language on deep, rapid and sustained emissions reductions and the [Cop 28] energy package, climate think-tank E3G said. But Saudi Arabia has made clear that this was unacceptable, while India, which worked to water down a coal deal at Cop 26, is pushing back on the 1.5°C temperature limit of the Paris Agreement. Negotiators are starting to run out of time. Draft after draft, the divide fails to be breached with no agreement on an amount for the finance deal. "We cannot talk about a lower or higher number because there is no number," noted Colombia's environment minister Susana Muhamad. The next iteration should have numbers based on the Cop 29 presidency's "view of possible landing zones". The fact that the draft text on finance has no bridging proposal is a concern, non-profit WRI director of international climate action David Waskow said. Finance was always meant to be the centrepiece of Cop 29. Parties have not formally discussed the goal in 15 years, and have been trying to prepare for a new deal through technical meetings for the past two years. But the discussion needs to end in Baku. By Caroline Varin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Cop: EU, four countries commit to 1.5°C climate plans

21/11/24

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21/11/24

Cop: EU, four countries commit to 1.5°C climate plans

Baku, 21 November (Argus) — The EU, Canada, Mexico, Norway and Switzerland have committed to submit new national climate plans setting out "steep emission cuts", that are consistent with the global 1.5°C temperature increase limit sought by the Paris Agreement. The EU and four countries made the pledge at the UN Cop 29 climate summit in Baku, Azerbaijan today, and called on other nations to follow suit — particularly major economies. Countries are due to submit new climate plans — known as nationally determined contributions (NDCs) — covering 2035 goals to the UN climate body the UNFCCC by early next year. The EU, Canada, Mexico, Norway and Switzerland have not yet submitted their plans, but they will be aligned with a 1.5°C pathway, EU climate commissioner Wopke Hoekstra said today. The Paris climate agreement seeks to limit the global rise in temperature to "well below" 2°C and preferably to 1.5°C. Canada's NDC is being considered by the country's cabinet and will be submitted by the 10 February deadline, Canadian ambassador for climate change Catherine Stewart said today. Switzerland's new NDC will also be submitted by the deadline, the country's representative confirmed. Pamana's special representative for climate change Juan Carlos Monterrey Gomez also joined the press conference today. Panama, which is designated as carbon negative, submitted an updated NDC in June. It is planning to submit a nature pledge, Monterrey Gomez said. "It is time to streamline processes to get to real action", he added. The UK also backed the pledge. The UK announced an ambitious emissions reduction target last week. The UAE — which hosted Cop 28 last year — released a new NDC just ahead of Cop 29, while Brazil, host of next year's Cop 30, released its new NDC on 13 November during the summit. Thailand yesterday at Cop 29 communicated a new emissions reduction target . Indonesia last week said that it intends to submit its updated NDC ahead of the February deadline, with a plan placing a ceiling on emissions and covering all greenhouse gases as well as including the oil and gas sector. Colombia also indicated that its new climate plan will seek to address fossil fuels, but it will submit its NDC by June next year . By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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