German Renewable Energy Sources Act
The Renewable Energy Sources Act or EEG is a series of German laws that originally provided a feed-in tariff scheme to encourage the generation of renewable electricity. The specified the transition to an auction system for most technologies which has been finished with the current version EEG 2017.
The EEG first came into force on 1April 2000 and has been modified several times since. The original legislation guaranteed a grid connection, preferential dispatch, and a government-set feed-in tariff for 20years, dependent on the technology and size of project. The scheme was funded by a surcharge on electricity consumers, with electricity-intensive manufacturers and the railways later being required to contribute as little as 0.05¢/kWh. For 2017, the unabated [|EEG surcharge] is. In a study in 2011, the average retail price of electricity in Germany, among the highest in the world, stood at around.
The EEG was preceded by the Electricity Feed-in Act which entered into force on 1January 1991. This law initiated the first green electricity feed-in tariff scheme in the world. The original EEG is credited with a rapid uptake of wind power and photovoltaics and is regarded nationally and internationally as an innovative and successful energy policy measure. The act also covers biomass, hydroelectricity, and geothermal energy.
A significant revision to the EEG came into effect on 1August 2014. The prescribed feed-in tariffs should be gone for most technologies in the near future. Specific deployment corridors now stipulate the extent to which renewable electricity is to be expanded in the future and the funding rates are no longer set by the government, but are determined by auction. Plant operators market their production directly and receive a market premium to make up the difference between their bid price and the average monthly spot market price for electricity. The EEG surcharge remains in place to cover this shortfall. This new system was rolled out in stages, starting with ground-mounted photovoltaics in the 2014 law. More legislative revisions for the other branches were introduced with the current EEG on 1January 2017.
The current EEG has been criticized for setting the deployment corridors too low to meet Germany's long-term climate protection goals, particularly given the likely electrification of the transport sector. The government target for the share of renewables in power generation is at least 80% by 2050.
Background
The pioneer EEG and its predecessor the Electricity Feed-in Act class as feed-in tariff schemes, a policy mechanism designed to accelerate the uptake of renewable energy technologies. The scheme offers long-term contracts to renewable energy producers, based on the cost of generation of the particular technology in question. In addition, a grid connection and preferential dispatch are also guaranteed. The tariffs themselves are funded by a levy or surcharge on electricity consumers, with electricity-intensive manufacturers being largely exempted. The EEG surcharge is based on the difference between the specified feed-in tariffs paid under the EEG and the sale of the renewable energy at the EEX energy exchange by the grid operators., the TSOs comprise 50Hertz Transmission, Amprion, Tennet TSO, and :de:TransnetBW|TransnetBW.Amendments to the original EEG added the concept of a market premium in 2012. And the use of deployment corridors and auctions to set the levels of uptake and remuneration, respectively, in 2014.
The EEG has generally been regarded as a success. The EEG led to the particularly rapid uptake of two renewable energy technologies: wind power and photovoltaics. The high growth of photovoltaics in Germany is set against its relatively poor solar resource. As the US NREL observed:
The share of electricity from renewable energy sources has risen dramatically since the introduction of the EEG in 2000. The average annual growth rate is around 9billion kWh and almost all of this increase is due to electricity generation that qualifies for EEG payments. The EEG is also responsible for 88.3 Mt eq of avoided emissions in 2014, thus making a significant contribution to Germany's climate protection targets. The following [|table] summarizes the remarkable uptake of renewables and in particular photovoltaics:
| Year | Hydropower | Onshore wind | Offshore wind | Biomass | Photovoltaics | Geothermal | Total gross electricity generation | Share of gross electricity consumption |
| 1990 | 17,426 | 71 | — | 1,435 | 1 | — | 18,933 | 3.4 |
| 1995 | 21,780 | 1,500 | — | 2,010 | 7 | — | 25,297 | 4.7 |
| 2000 | 21,732 | 9,513 | — | 4,731 | 60 | — | 36,036 | 6.2 |
| 2005 | 19,638 | 27,229 | — | 14,354 | 1,282 | 0.2 | 62,503 | 10.2 |
| 2010 | 20,953 | 37,619 | 174 | 34,307 | 11,729 | 28 | 104,810 | 17.0 |
| 2014 | 19,590 | 55,908 | 1,449 | 49,219 | 35,115 | 98 | 161,379 | 27.4 |
Under the legislation, hydropower includes "wave, tidal, salinity gradient and marine current energy". The use of biomass for electricity generation has also grown as a result of the EEG. Biomass includes: "biogas, biomethane, landfill gas and sewage treatment gas and from the biologically degradable part of waste from households and industry". Mine gas is in a separate category.
Germany's national energy policy is set out in the government's Energy Concept released on 28September 2010. On 6June 2011, following Fukushima, the government removed the use of nuclear power as a bridging technology and reintroduced a nuclear phase-out. Boosting renewable electricity generation is an essential part of national policy.
The EEG is also a key element in the implementation of EU Directive 2009/28/EC on the promotion of the use of energy from renewable sources. This directive requires Germany to produce 18% of its gross final energy consumption from renewable energy sources by 2020. In this endeavour, the EEG is complemented by the Renewable Energies Heat Act. A chart overviewing German energy legislation in 2016 is available.
Legislation
The first discussions on feed-in tariffs in the German parliament began in the 1980s. The :de:Solarenergie-Förderverein Deutschland|Association for the Promotion of Solar Power, Eurosolar, and the :de:Bundesverband deutscher Wasserkraftwerke|Federal Association of German Hydroelectric Power Plants floated early concepts for a FIT scheme. The Economics Ministry and the CDU/CSU and FDP parties opposed non-market measures and argued for voluntary renewables quotas instead. In the late 1980s, CDU/CSU and Green politicians drafted a feed-in tariff bill and sought parliamentary and external support. The newly formed Environment Ministry backed the proposal. The incumbent electricity producers did not devote much effort to counter the bill because they believed its effects would be minimal and their lobby effort was preoccupied with the takeover of the East German electricity system following German reunification in 1989. The bill became the Electricity Feed-in Act.Prior to the Electricity Feed-in Act, operators of small power plants could only obtain access to the grid at the behest of the grid owners and were sometimes refused entirely. Remuneration was based on the averted costs faced by the energy utilities, yielding low rates and unattractive investment conditions. Government support for renewable electricity before the act was primarily through R&D programs administered by the Federal Ministry for Research and Technology.
Electricity Feed-in Act (1991)
Germany first began promoting renewable electricity using feed-in tariffs with the Electricity Feed-in Act. The long title is the law on feeding electricity from renewable energy sources into the public grid. The law entered into force on 1January 1991. This legislation was the first green electricity feed-in tariff scheme in the world. The law obliged grid companies to connect all renewable power plants, to grant them priority dispatch, and pay them a guaranteed feed-in tariff over 20years.While the Electricity Feed-in Act did much to promote wind power, the installed capacity of photovoltaic installations remained low. The remuneration for photovoltaics was simply too little in most settings. Low-interest loans were then offered under additional government programs.
Beginning in 1998, the Electricity Feed-in Act was challenged under European Union anti-subsidy rules by PreussenElektra. The European Court of Justice found that the arrangements did not constitute state aid. The court concluded:
The Electricity Feed-in Act suffered from structural flaws. First, the coupling of feed-in tariffs to the electricity price proved too volatile to ensure investment security. Second, the distribution of burdens was uneven, with grid operators in high-wind regions having to pay out more. In light of this latter concern, the act was amended in 1998 to introduce, among other things, a double 5% cap on feed-in purchases. This ceiling slowed uptake in some regions.
The Electricity Feed-in Act was enacted by a CDU/CSU/FDP coalition government.
PV Interim Act (2003)
The PV Interim Act raised photovoltaic tariffs from 1January 2004 and in particular for small rooftop installations, to compensate for the ending of low-interest loans under the expiring 100,000 roofs program. The limit on free-standing photovoltaic systems exceeding 100kWp and the 1000MWp cap on photovoltaic installations in total were both removed.PV Act (2010)
It was becoming clear that action on the photovoltaic remuneration was necessary. The growth in photovoltaics had exceeded all expectations. In 2009 alone, MWp of capacity was installed. As a result, the support costs had skyrocketed.The government responded with the PV Act which entered into force retrospectively with effect from 1July 2010. The legislation introduced a dramatic reduction in photovoltaic tariffs, cutting these between 8 and 13% depending on the installation type, followed by a second cut of 3%. The deployment corridor was doubled to between 2500 and 3500MWp, along with tighter growth-dependent degression rates of 1–12%, in addition to the ordinary degression of 9%. The self-consumption incentive was significantly raised to around 8¢/kWh and eligibility extended to systems up to 500kWp. The feed-in rate itself was dependent on the system size and the proportion of demand that was consumed on-site. Free-standing systems were excluded from using agricultural land.
PV Interim Act (2011)
The PV Interim Act introduced the possibility of further downward adjustments for the photovoltaic tariffs during the year. If the installed capacity during the first months of the year exceeded the equivalent of 3,500 MWp per year, feed-in tariffs would be lowered by 1July 2011 for rooftop systems and 1September 2011 for free-standing systems. It also modified the flexible cap to better control the growth of photovoltaics.In application of the EEG version in force at the time, no further adjustment to the feed-in tariffs occurred in 2011. This is explained because the installed capacity between 28 February 2011 and 1 June 2011 was less than 875 MWp.
PV Act (2013)
Despite the cutbacks in photovoltaic support, photovoltaic installations continued to boom. In December 2011 alone, 3000MWp were added in an effort to beat the tariff reductions beginning in 2012. Moreover, the EEG surcharge had grown to 3.53¢/kWh for 2011, with the largest component being photovoltaic remuneration. The EEG surcharge was projected to grow considerably, despite the falling tariff structure. For the first time, cost control became the "determining factor" in the political debate over the EEG.This was despite the fact that the merit order effect had been depressing electricity spot prices. The merit order effect occurs when preferentially dispatched wind and photovoltaic generation displaces more expensive fossil fuel generation from the margin – often gas-fired combined cycle plant – thereby driving down the cleared price. This effect is more pronounced for photovoltaics because their midday peak correlates with the maximum generation requirement on the system. The merit order effect also lowers the revenues for conventional power plants and makes them less economically viable. A 2007 study finds that "in the case of the year 2006, the volume of the merit order effect exceeds the volume of the net support payments for renewable electricity generation which have to be paid by consumers". A 2013 study estimates the merit order effect of both wind and photovoltaic electricity generation for the years 2008–2012: the combined merit order effect of wind and photovoltaics ranges from 0.5¢/kWh in 2010 to more than 1.1¢/kWh in 2012.
The PV Act came into force retrospectively on 1April 2012. The tariff cuts were up to 30%, with the tariff cuts scheduled in the EEG for 1July 2012 advanced and tightened from their original 15%. The system size categories were changed, now up to 10, 40, 1000, and kWp. A new category of 10–40kWp was introduced, while free-standing systems were limited to 10MWp. The regular standard degression was set to 1% per month, equal to 11.4% per year, and replacing the previous six-monthly adjustment. The flexible cap for the deployment corridor remained unchanged at 2500 to 3500MWp per year. If new additions exceed this corridor, the degression rises by 1.0% up to 2.8%. A hard cap on the total photovoltaic capacity was introduced, set at 52GWp. The self-consumption privilege was removed for new installations, as grid parity was already met: the feed-in tariff for roof systems at 19.5¢/kWh was now lower than the average electricity price for households at 23¢/kWh. Changes to the market integration model reduced the eligibility for remuneration of systems between 10 and 1000kWp to 90% of their electricity production from 2014 onwards. The residual electricity could either be self-consumed or sold on the electricity market.
Purpose and aim
The purpose of the EEG is stated in the legislation:The EEG also contains statutory targets for the share of renewable energy in gross final electricity consumption :
| Year | Share of renewable energy in gross final electricity consumption |
| 2025 | 40–45% |
| 2035 | 55–60% |
| 2050 | >80% |
Deployment corridors
The EEG specifies binding trajectories for the following individual technologies:| Renewable energy technology | New capacity/year |
| Solar energy | 2.5GWp |
| Onshore wind energy | 2.5GW |
| Biomass | approx 100MW |
| Renewable energy technology | Installed capacity |
| Offshore wind energy | by 2020: 6.5GW |
| Offshore wind energy | by 2030: 15GW |
Details
The level of remuneration is still prescribed under the EEG until 2017. However the way that new installations receive their remuneration has changed. Most plant operators must now directly market their output, for which they get an additional market premium payment instead of an explicit feed-in tariff. This premium is the difference between the average monthly wholesale price at the EEX energy exchange and the fixed remuneration stated in the EEG. Installations under 100kW are exempt from these provisions and existing installations will continue to operate under the rules under which they were established. From 2014–2017 onwards, defined remuneration rates will be replaced by competitive bidding, also known as auctions or tenders. Those investors offering the lowest prices will then receive support. The new act does not specify the auction model in detail, but potential designs were piloted in 2015 using ground-mounted photovoltaic systems.The flexible cap mechanism for expansion corridors was replaced with set annual targets for the addition of wind, photovoltaic, and biogas capacity. The government hopes these new corridors will lead to a better coordination between renewables and the use and expansion of the transmission network, as well as improving planning security for conventional generators.
The target corridor for photovoltaics is set at 2.4 to 2.6GWp per year and the hard cap of 52GWp remains in place. Photovoltaic installations beyond this upper bound will not receive funding under the EEG. The remuneration for photovolatic installations is reduced 0.50 percent every month, unless the installed capacity in the preceding months is below or above the installed capacity target. The degression rate can increase or decrease according to the deviation from the 2,500 MWp goal during the twelve months prior to the beginning of each quarter. The corresponding degression rate is then used during the three months of the quarter, in the following way:
- If installed capacity exceeds the target by more than 4,900 MWp, feed-in tariff decreases 2.80 percent
- * by more than 3,900 MWp, 2.50 percent,
- * by more than 2,900 MWp, 2.20 percent,
- * by more than 1,900 MWp, 1.80 percent,
- * by more than 900 MWp, 1.40 percent,
- * by up to 900 MWp, 1.00 percent.
- If installed capacity falls between 2,400 and 2,600 MWp, the feed-in tariff decreases 0.50 percent.
- If installed capacity is below the target by less than 900 MWp, feed-in tariff decreases 0.25 percent
- * by more than 900 MWp, the feed-in tariff remains the same,
- * by more than 1,400 MWp, to zero; the feed-in tariff may rise on a one-off basis by 1.50 percent on the first calendar day of the respective quarter.
On 16April 2014 the European Commission found that EEG support for 20 offshore wind farms totalling almost 7GW was not state aid. On 23July 2014 the European Commission approved the EEG, having assessed it to be in line with EU rules on state aid. Indeed, the EEG was the first revision of the Renewable Energy Sources Act to be "materially shaped by the Commission's view on state aid".
In July 2015 the Economics and Energy Ministry released a design document covering renewables auctions. In early 2016 the BMWi reported that the ground-mounted photovoltaics tender pilot, comprising three auction in 2015, was successful. The BMWi also stated that the competition was high and that prices fell from round to round. It added that small bidders were able to win tenders. These results will be used to develop auctions for other renewable electricity generation technologies.
The sixth and last round of PV auctions under this particular legislation produced 27successful bids totaling. The average successful price was and the lowest awarded price was. These figures confirm a falling trend from auction to auction.
The 2014 legislation was overseen by a CDU/CSU/SPD grand coalition government.
Reactions
In January 2016, in response to the official proposals, Greenpeace Germany cautioned that a complete overhaul of the successful EEG would endanger climate protection targets. The :de:Bundesverband Windenergie|German Wind Energy Association and others are calling for a 2.5GW net capacity addition for onshore wind energy per annum that is not dependent on the increase of offshore wind. They also say that the 40–45% renewables target by 2025 should not be treated as a fixed ceiling. The German Engineering Federation said that "the EEG amendment gives rise to growing uncertainty in the industry" and that "it is however not right to regulate the expansion of renewable energy production by controlling the tendering volume for onshore wind energy and inflexibly clinging on to a 45% target in the electricity sector".Estimates for 2012 suggest that almost half the renewable energy capacity in Germany is owned by citizens through energy cooperatives and private installations. Critics worry that the new rules will preclude citizen participation, despite the special provisions for cooperatives and individuals. Preparing tenders is expensive and that expenditure is sunk if the bid fails. In January 2016 Greenpeace Energy said that renewables auctions would make the Energiewende less fair and that citizen cooperatives and small investors would be at a disadvantage. Germanwatch, WWF-Germany, and Deutsche Umwelthilfe, three German NGOs, said the proposed reforms do not properly account for small, citizen-owned renewables projects. Citizen participation is seen as a key reason for the widespread public acceptance of renewable technologies in Germany. That support may lag if the EEG reforms favor large companies over cooperatives and individuals.
Political positions ahead of 2017 elections
In November 2016, the CDU revealed that it is considering scrapping the EEG, although it remains undecided as to whether it will make this an election issue for 2017.2019 European Court of Justice state aid ruling
In March 2019, the European Court of Justice ruled that feedin tariffs do not class as state aid, admissible or otherwise. This landmark decision annuls an earlier Commission decision that the [|German renewable energy law of 2012] involved state aid. More specifically, the ECJ found that the Commission had failed to establish that the advantages provided by feedin trariffs involved state resources and therefore constituted state aid.EEG surcharge
The EEG surcharge and the aggregate EEG surcharge have both risen steadily since 2000. The technologies that make up the largest share of the 2015 EEG surcharge are: photovoltaics at 43%, biomass at 25%, and onshore wind energy at 19%. Three percent is retained for past and future forecast errors and thereby provides a liquidity reserve.| Year | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 |
| EEG surcharge | 0.410 | 0.580 | 0.680 | 0.880 | 1.020 | 1.120 | 1.130 | 2.047 | 3.530 | 3.592 | 5.277 | 6.240 | 6.170 | 6.354 | 6.880 |
| Change from prior year | — | 41.5 | 17.2 | 29.4 | 15.9 | 9.8 | 0.9 | 81.2 | 72.4 | 1.8 | 46.9 | 18.2 | −1.1 | 3.0 | 8.3 |
Consumers who cannot reclaim the additional 19% VAT will pay that as well, which includes private households.
Feed-in tariffs
The structure and development of feed-in tariffs over the course of the EEG is a complex topic. This section is simply intended to give an indication. The feed-in tariffs for all technologies applicable as of 2014 are listed here. The following table summarizes onshore wind energy remunerations from April 2000 to October 2016.The table below summarizes photovoltaics remunerations from August 2004 to January 2012., under the EEG mandate, the Federal Network Agency publishes the currently installed PV capacity with adjusted feed-in tariffs monthly as a downloadable spreadsheet. Otherwise, for data beyond January 2012, please see: feed-in tariffs in Germany.
Politics
The development of the EEG has been the subject of political science analysis. A 2006 study finds that "the regulatory framework is formed in a 'battle over institutions' where the German parliament, informed and supported by an advocacy coalition of growing strength, backed support policies for renewables sourced electricity against often reluctant governments and the opposition from nuclear and coal interests".A 2016 thesis finds that two broad coalition of actors faced each other off over the development of the EEG legislation: an 'economic coalition' that opposed support for renewables and sought to protect nuclear power and fossil fuel interests and an 'environmental coalition' that took the opposite stance. The economic coalition wanted unassisted market competition to prevail and preferred large-scale facilities. The environmental coalition comprised environmental organizations, the renewables industry, farmers, the metal workers unions, a German engineering association, partly the :de:Zentralverband des Deutschen Handwerks|German Confederation of Skilled Crafts, and some industrial corporations with renewables interests. When the EEG was proposed in the late-1990s, the incumbent energy companies markedly underestimated the technological potential of renewables, believing them to be suitable only for niche roles. They were not alone, almost all politicians and scientists of the time did so too. The opposition to the EEG was therefore muted. Concurrent lobbying over the nuclear phase-out also diverted industry attention away from the EEG negotiations. Notwithstanding, the success of the EEG can be traced a small dedicated group of parliamentarians who forged an alliance between various business groups, unions, environmental NGOs, and other idealistic interest groups. Yet despite expectations, renewable generation came to account for 27.4% of gross electricity consumption in 2014 and seriously threatened the business model of the incumbents. As history shows, the environmental coalition prevailed till 2014 at least, underpinning the development of the EEG legislation, the nuclear phase-out, and the German Energiewende more generally.
Greenpeace Germany believes that ongoing EU/US TTIP trade agreement negotiations have influenced the EEG onwards. Earlier versions of the EEG could be interpreted as inhibiting free trade and that granting renewable energy preferential dispatch may still be illegal under the proposed treaty.
Effectiveness
Between 2015 and 2017, the fixed feed-in tariff scheme, introduced in 1991, is being phased out for around 80% of installations in favor of an auction system. This change is defined under the EEG and subsequent legislation.Feed-in tariff scheme (pre-2015–2017)
Various studies have found that a fixed feed-in tariff scheme provides financial certainty and is more cost effective and less bureaucratic than other forms of support, including investment or production tax credits, quota-based renewable portfolio standards, and auction mechanisms. In 2008 the European Commission concluded that :When the avoided external costs are compared to the compensation that renewable energy operators were paid for electricity from renewable energy, a 2003 study finds that the reduced environmental impacts and related economic benefits far outweigh the additional costs required to compensate the producers of electricity from renewable sources. Accounting for the external costs of fossil fuel use and thus "level the playing field" had been one of the key purposes when constructing the original EEG. A feed-in tariff scheme generates more competition, more jobs, and more rapid deployment for manufacturing and does not require the picking of technological winners, such as between wind power and photovoltaics. Denmark and Germany have been at the forefront of FIT scheme development.
A 2008 economics study by RWI Essen was hugely critical of the high levels of feed-in support afforded photovoltaics. The study argues that the 2005 European Union Emission Trading Scheme was sufficient to drive the transition towards a low-carbon economy, that the EEG does nothing intrinsic to reduce greenhouse gas emissions, and that the electricity produced represents one of the most expensive greenhouse gas abatement options on offer.
Auction system (post-2015–2017)
In June 2016 economist Claudia Kemfert from DIW Berlin contended that the new auction system, introduced with the EEG and being refined under the proposed EEG, will not reduce costs, but will rather undermine planning security and increase the risk premium applied by investors. In addition, the auction system will lead to deployment corridors being missed as companies holding tenders delay construction for whatever reason.General
The positive impact on the environment globally is less clear. Hans-Werner Sinn, a German economist and chair of the Ifo Institut für Wirtschaftsforschung argues that Germany's renewable energy support reduces world market prices for fossil energy. Thus, countries like China or the US have an incentive to produce more, and the net effect on the climate is zero. This effect is known as the green paradox.Outlook
Grid reinforcement
One challenge that lies ahead is integrating the electricity generated by decentralized renewable energy into the existing electricity grid structure. The grid was built to suit the centralized energy system of the then four main energy companies, namely, E.ON, EnBW, RWE, and Vattenfall.The need for grid reinforcement from north to south is commonly recognized. In response, the four TSOs proposed 92 expansion projects covering 7300km of lines, but not all will be required or approved. In 2015 the Federal Network Agency released its report on grid expansion plans covering the next decade. Rapid development of the grid is being driven by the uptake of renewables and the phase-out of nuclear power.
But not all experts agree that a substantial build-out of the grid is necessary. Claudia Kemfert believes the large amount of coal-fired generation on the system is part of the problem. Kemfert said "our studies and models show that grid extension does no harm, but it's not strictly necessary decentralised, intelligent grids with demand management and, in the medium term, storage, would be much more important." Analysis for Greenpeace Germany in 2016 also suggests that it is inflexible coal and nuclear plants that are clogging the grid and driving up wholesale electricity prices.
Deployment corridors
The EEG specifies technology-specific deployment corridors which will be tracked by the new auction system. Environmental NGOs and renewable energy advocates argue that these corridors are insufficient to meet Germany's climate protection goals. Greenpeace Germany observes "to reduce renewables to 45% in 2025 means expanding the fossil share to 55%, with the aim of mitigating the impact on large utilities". Patrick Graichen from the Berlin energy policy institute Agora Energiewende agrees that the deployment corridors are set too low to reach renewables targets beyond 2025.A 2016 report by Volker Quaschning of HTW Berlin concludes that Germany will need to accelerate its renewables uptake by a factor of four or five to reach the lower 2015 Paris Agreement global warming target of 1.5°C. Moreover, this target will require the energy sector to be carbon free by 2040. Give the likely electrification of the transport and heating sectors, the deployment corridors laid out in the EEG are wholly inadequate. Onshore wind generation should instead grow by 6.3GW net per year and photovoltaics by 15GWp.
Economic aspects
A 2011 paper from DIW Berlin modeled the deployment of various renewable energy technologies until 2030 and quantified the associated economic effects. The uptake of renewable energy simultaneously creates business opportunities and imposes social costs for promotion. The study reveals that the continued expansion of renewable energy in Germany should benefit both economic growth and employment in the mid-term.The Berlin energy policy institute Agora Energiewende predicts that the EEG surcharge will peak around 2023 and then decline. The reasons being that expensive projects committed at the beginning of the EEG in 2000 will begin to expire after their 20years of support, that new projects are now much cheaper, and that the trend of reducing generation cost will continue.