Environmental Engineering Reference
In-Depth Information
To compound the risks faced by wind power developers, the average retail
cost of electricity declined due to a government phase-out of a coal levy and
enhanced economic eiciency, which was a byproduct of the liberalization
of Germany's power markets (to adhere to EU directive (96/92/EC)). his
had an adverse impact on wind power development, because the 1991 feed-
in act had linked wind power generation revenue to the average retail cost
of electricity (the 90% clause). Consequently, although wind power capacity
continued to expand in 1996 and 1997, there was suicient market risk to
slightly rein in this emerging bull market.
Two developments unfolded in 1998 to escalate the pace of wind power
difusion. In that year, the European Court of Justice ruled that the German
feed-in tarif was in compliance with European state aid regulations and
dismissed the utility-led legal challenge that had unsettled development
prospects. In the same year, the federal building act was amended in order
to speed up the wind power siting process.
15
hese developments fueled a
second wind boom, which saw installed capacity grow from 2082 MW at the
end of 1997 to 4445 MW by the end of 1999.
his is not to say that wind power development in the late 1990s was
devoid of conlict. here were still pockets of community opposition, par-
ticularly in regions with comparatively high wind power capacity. Moreover,
there was still a degree of resistance from utilities. his was a time of market
liberalization. herefore, the prime focus of utilities was on consolidating
market positions, not challenging new technologies.
16
he success of wind power development in Germany emulated the Danish
model in nurturing a blossoming industry featuring irms such as Enercon,
Micon, Tacke, and AN Windenergie, which in aggregate employed 15,600
people by 1998.
17
Consequently, although there were concerns voiced that
the feed-in tarifs were excessive, there was still broad political support for
maintaining robust subsidies. his staunch commitment came to be known
as the tailwind movement.
here was one other political development in the late 1990s that inluenced
wind power fortunes. In 1998, after 16 years of rule by a conservative-liberal
coalition led by Helmut Kohl, a red/green coalition of the Social Democratic
Party (SPD) and the Green party, under the chancellery of Gerhard Schroeder,
assumed power. his new administration was even more supportive of wind
power development than the preceding administration, announcing plans to
increase renewable energy contributions to the electricity supply to 12.5% by
2010 and 50% by 2050. In April 1999, it introduced an electricity tax to pro-
vide inancial support for its renewable energy development policy.
18
By the
fall of 1999, a new and improved feed-in tarif had also been tabled for discus-
sion. As opposed to the feed-in tarif of 1991, which was passed unanimously
