"Too few wind energy projects approved"

September 2019 – "Climate policy total failure", "zero number", "despondent patchwork" - formulations of this kind, which express the sharp criticism of the climate package of the Federal Government from business, politics and associations, could be continued in endless loops. How does Hamburg Commercial Bank, which has been supporting and financing renewable energy projects for more than 25 years, assess the catalogue of measures that will enable Germany to achieve its climate targets in 2030? Nils Driemeyer, Global Head of Renewable Energy of Hamburg Commercial Bank, comments.

Nils Driemeyer, Global Head of Renewable Energy of Hamburg Commercial Bank
Nils Driemeyer, Global Head of Renewable Energy of Hamburg Commercial Bank

How do you rate the package?

Nils Driemeyer: Short and sweet: Good Approaches, but too short. The introduction of CO2 pricing for conventional fuels is an important and correct step towards a cause-based pricing of CO2 emissions and a relative increase in the price of fossil fuels. This is not, however, to be adopted in its adopted form. It will be sufficient to switch to renewable energies in all sectors and provide the necessary impetus for the necessary construction of new wind and solar parks. The other CO2 reduction measures are also heading in the right direction, but are not very stringent. Thus the climate package is primarily based on incentives rather than on targeted control. This means that achievement of the climate targets cannot be guaranteed ex ante. This will require additional concrete CO2 savings paths for all sectors and a tight after-tax system.

Where do you think it's stuck?

Nils Driemeyer: Increasing the share of renewables to 65% is an important goal in Germany. However, this goal is currently in danger as too few wind farm projects are approved and built. In addition to the availability of land, a solution must also be found for public acceptance. A simple increase of the minimum distance to new wind farms is not suitable. It is unacceptable that investors and banks sometimes have to wait years for a final approval. Here the legislator is particularly called upon to ensure clarity.

What do you like about the cornerstone paper?

Nils Driemeyer: Those who currently store the electricity in their wind farm that they cannot feed into the grid will be penalized because both the electricity produced and the electricity fed into the grid from the storage facility will be subject to charges. This is now being changed and will lead to wind and solar parks becoming more base load capable. However, only if the feed-in priority for new renewable energy projects is also abolished in parallel, as this is the only way to provide a real incentive to store surplus renewable energy quantities exists.

Can Hamburg Commercial Bank benefit from the climate package?

Nils Driemeyer: The German government's climate package addresses the right issues, but in our view it does not go far enough. In order to really achieve a market-oriented expansion of renewable energies, topics such as CO2pricing must be thought through more consistently to the end. The renewable energy sector has outgrown its infancy and can stand on its own two feet without the support of the state. Financing of larger wind and solar parks without subsidies is possible throughout Germany with a modified regulatory framework. We like to show you how!