Feed-in Tariffs Do More for Wind at Less Cost to Ratepayers than RPS, Says German Agency

In a recent report, the German Renewable Energy Agency says that across Europe countries using feed-in tariffs develop more wind energy and pay less for it than countries using quota systems.

In North America, the quota model is known variously as Renewable Portfolio Standards (RPS) or Renewable Energy Standards.
The agency, the Agentur für Erneuerbare Energien, says that RPS-related tendering programs raise the payments for wind energy in Europe to as much as €0.15/kWh ($0.19/kWh) in Italy. In contrast, Germany, which uses a feed-in tariff, pays only €0.089/kWh ($0.11/kWh). Spain, which also uses a feed-in tariff, pays even less.

Germany operates the most wind energy capacity in Europe, 29,000 MW, Spain follows with nearly 22,000 MW.

Italian wind generation has fallen behind electricity generation from solar photovoltaics for the first time in an industrialized country. Italy uses feed-in tariffs to pay for solar energy instead of a trading system in green certificates, one of the hallmarks of a quota system.

Great Britain, which also uses a quota system for large-scale wind energy and has the best wind resources in Europe, pays 20% more for wind energy than Germany: €0.108/kWh ($0.135/kWh). More than half of German wind capacity is now installed in lower wind areas of mid-Germany and yet Germany still pays less than Great Britain for wind energy.

Payments for wind energy normally reflect the costs of wind energy and costs are substantially less where the wind resources are greater. Thus, it is unusual that Britain pays more for wind energy than Germany even though its wind resource is so much better.