The Energy Regulation and Markets Review - Stikeman Elliott

Germany
face not only technological and regulatory difficulties but also a lack of financial, material
and personal resources.
Further technological improvements have been achieved in the development of
smartgrids and smart metering. In this context, the recent amendment of the EnWG
particularly strengthens smartgrids by equipping test regions with such technology in order
to assess the impact of intelligent power networks and their practical implementation.
In addition, the respective law also substantiates the implementation of smart metering.
So far, Germany has taken no significant part in the development of liquefied
natural gas (‘LNG’) as there is no single landing facility to accommodate LNG carriers
in Germany. Similarly, the technique of carbon capture and storage (‘CCS’) has no
considerable support in Germany. So far, the German legislator has not succeeded in
transposing the European CCS Directive 2009/31/EC into German law.
VI
THE YEAR IN REVIEW
From a regulatory point of view, the transformation of the European Third Energy
Package into the EnWG is of particular relevance. As a consequence, the German TSOs
have to comply with the rather strict ownership unbundling requirements and seek
certification.
Apart from that, the energy turnaround initiated by the German government
on the basis of its nuclear moratorium constitutes the main reason for the major policy
shift in the German energy sector. This development had an immediate impact on the
generation and wholesale supply level, in particular on prices during periods of high
demand. Furthermore, the gradual phase-out of nuclear power generation until 2022
initiated a shift towards an increased promotion of renewable energy resources, in
particular offshore wind power. However, both a lack of material and financial resources
as well as regulatory constraints are currently delaying the extension of offshore projects.
Furthermore, the envisaged extension of offshore facilities also requires an extension of
onshore transmission capacity. In this regard, the legislation in force, the Energy Line
Extension Act implemented in 2009 and the Grid Expansion Acceleration Act, do not
provide a sufficient and effective legal framework.
VII
CONCLUSIONS and OUTLOOK
German energy policy was subject to significant changes throughout the past year.
Certainly, the energy turnaround constitutes a major driver for past and also for future
legislation. However, the legislator and the competent regulatory authorities face
substantial challenges and difficulties particularly in relation to the envisaged extension
of offshore generation capacities and establishing sufficient onshore transmission
capacities. Remaining uncertainties have to be resolved in order to achieve the ambiguous
renewable energy targets and further to facilitate European cross-border energy markets.
As these topics are also constantly progressing at European level, it is fair to say that the
development of the energy turnaround will dominate the development of Germany’s
energy markets for the next couple of years, if not for the coming decades.
107