Author

Carsten Bartholl

Partner

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Author

Carsten Bartholl

Partner

Read More

12 July 2021

Publication series – 4 of 21 Insights

Renewable Energy Wrap-Up - Germany

  • Briefing

With our Corporate Energy @TW series, we aim to shed light on current developments and topical issues in the renewables sector across different jurisdictions. Taylor Wessing’s international industry group Energy & Infrastructure contains more than 50 experts in 16 locations. Being active in the field of renewables transactions and financing for more than a decade, we have built a substantial track record and are in 4th place worldwide in the Clean Energy League Tables 2021 by number of clean energy M&A deals.

Question: What are the most important current developments in the field of renewable energy transactions and financing?
Response: In Germany, we are increasingly occupied with large-scale and large-volume solar parks, mostly still in early development phases (regularly 50 MWp and larger up to 200 MWp). This development goes along with a decreasing supply of land and additional public-law restrictions on land use. At the same time, the demand especially from large industrial electricity consumers for the supply of very substantial quantities of green electricity is increasing continuously. As a result, long-term electricity supply contracts are relevant primarily in the PV sector.

In the onshore wind sector, green power purchase agreements are currently only an issue for plants after the end of the subsidization period due to the still relatively attractive subsidies and the lack of area limitations compared to solar PV. PPAs are of course also topical in the offshore wind sector, not least due to the "0 EURO auction results" from the last German offshore tenders. With respect to project finance, in contrast to subsidized projects (e.g. onshore wind farms), the challenge for the implementation of (large-volume) PPAs lies in securing the necessary financing (higher share of equity required).

In general, observing the interplay of further developing supply and at the same time massively increasing demand and advising against this turbulent market development is a fascinating task. This interplay has inevitably stimulated the transaction business in an exciting fashion.

Question: What market developments can we expect to see towards the end of 2021?
Response: We expect transaction activity in Germany to remain high. The demand for suitable investment projects in the renewable energy sector is not only unbroken, it continues to rise. The trend for investors to invest beyond the borders of their own jurisdiction also continues to grow. The increasing demand for solar PV and onshore wind projects in Germany has meant that we have been seeing an increase in transactions abroad for several years, initially in Spain and Italy, especially in the Scandinavian countries, and now also increasingly in Eastern Europe.

Question: What is your personal "game changer" or "highlight" in the field of renewable energies since the beginning of 2021?
Response: The decision of the Federal Constitutional Court on the unconstitutionality of the German Climate Protection Act was highly important, arguing that the legislator should not leave the greater burden of dealing with the climate crisis to future generations. Against this background, the Climate Protection Act is shall be quickly amended, and a first government draft is available. Industry, especially the energy-producing industry, is shall be assigned much more far-reaching reduction targets than before. However, the draft law explicitly leaves open how players in the industry actually realize these targets. The issue of how the demand for clean energy is to develop at the necessary speed (not to mention cost issues) in view of the current legal environment and the possibilities for expansion, which is also of particular concern to the economy, remains open.

In an "immediate action programme", which is currently being coordinated among the ministries, the federal government has set higher expansion targets for wind and solar energy - but once again these are non-binding. Urgently needed planning security for the affected economic sectors (i.e.: all of them) is missing (more on this topic in our Insight).

The ruling of a Dutch court against Shell at the end of May 2021 was also groundbreaking. For the first time, a multinational company was legally obliged to protect the climate; we can assume this ruling will have a signal effect. The question of whether individuals have a claim to climate protection against companies and states and can assert this claim may have far-reaching and not fully assessable (legal) consequences.

Finally, there were also important developments at a European level at the end of April 2021. The Commission presented a package of measures to incentivise more investment in sustainable activities. The package, part of the European Green Deal, includes the delegated regulation on EU climate taxonomy, a proposed directive on corporate sustainability reporting, and amending acts on fiduciary duties and on investment and insurance advice.
Do you have any questions or are you interested in an (interdisciplinary) exchange with our Corporate Energy team? We look forward to talking to you!


In this series

Projects, energy & infrastructure

Power Play: Renewable Energy Update

by Multiple authors

Energy & infrastructure

A new era for wind energy investments in Hungary

Power Play: Renewable Energy Update

26 January 2024

by Torsten Braner, LL.M.

Energy & infrastructure

Does monument protection hinder the expansion of renewable energies?

Power Play: Renewable Energy Update

16 August 2023

by Kris Breudel, LL.M. (Aberdeen)

Projects, energy & infrastructure

Renewable Energy Wrap-Up - Germany

Power Play: Renewable Energy Update

12 July 2021

by Carsten Bartholl

Energy & infrastructure

Focus PV – Floating Solar and Agrivoltaics

Power Play: Renewable Energy Update

23 March 2021

by Dr. Angela Menges

Projects, energy & infrastructure

Power-to-Hydrogen

Power Play: Renewable Energy Update

6 April 2021

by Dr. Janina Pochhammer

Projects, energy & infrastructure

Species protection exemption: Significance for wind energy

Power Play: Renewable Energy Update

25 May 2021

by Dieter Lang, LL.M.Eur.

Projects, energy & infrastructure

Floating Foundations for Offshore Wind Farms

Power Play: Renewable Energy Update

8 June 2021

by Dr. Janina Pochhammer

Projects, energy & infrastructure

Renewable Energy Wrap-Up – Austria

Power Play: Renewable Energy Update

18 August 2021

by Peter Solt, LL.M.

Projects, energy & infrastructure

Renewable Energy Wrap-Up – Poland

Power Play: Renewable Energy Update

21 September 2021

by Olav Nemling

Energy & infrastructure

Renewable Energy Wrap-Up – Netherlands

Power Play: Renewable Energy Update

2 December 2021

Environmental, planning & regulatory

Fit for 55 – Hydrogen and the Reform of the European Gas Market

Power Play: Renewable Energy Update

11 January 2022

Energy & infrastructure

Building energy performance: the revised Energy Performance of Buildings Directive

Power Play: Renewable Energy Update

14 February 2022

Energy & infrastructure

Renewable Energy Wrap-Up - United Kingdom

Power Play: Renewable Energy Update

15 March 2022

Energy & infrastructure

Renewable Energy Wrap-Up – France

Power Play: Renewable Energy Update

27 April 2022

by Nicolas De Witt, Sophie Pignon

Energy & infrastructure

Participation of local municipalities in the context of wind and photovoltaic projects

Power Play: Renewable Energy Update

5 May 2022

by Dieter Lang, LL.M.Eur.

Energy & infrastructure

Challenges for data center operators - The federal government’s draft bill for an energy efficiency act

Power Play: Renewable Energy Update

12 April 2023

by Multiple authors

Information technology

New IT security requirements for the energy sector

Power Play: Renewable Energy Update

1 September 2023

by Dr. Paul Voigt, Lic. en Derecho, CIPP/E, Alexander Schmalenberger, LL.B.

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