German caps on biomass and biomethane auctions to remain the same

Germany's Federal Network Agency for electricity and gas (the Bundesnetzagentur), set the price ceilings for biomass and biomethane auctions to be held in the next 12 months at the same levels as last year.
The maximum price that can be bid for new biomass installations remains 19.43 cents per kilowatt hour and that for existing biomass installations 19.83 ct/kWh.
The maximum price for biomethane installations has been kept at 21.03 ct/kWh.
"Keeping last year’s price ceilings for biomass and biomethane auctions ensures stable and reliable conditions," said Klaus Müller, president of the Bundesnetzagentur.
Price ceilings remain unchanged
Setting the price ceilings at last year’s levels creates a reliable framework for the auctions, according to the regulator.
Without the Bundesnetzagentur’s new determinations, the price ceilings would revert to the considerably lower limits set in the Renewable Energy Sources Act (EEG), it added.
Last year the Bundesnetzagentur had raised the price ceilings for biomethane installations and new biomass installations by 10%.
The new price ceilings take into account the forecast levelised costs of electricity as well as revenue that installation operators can generate in addition to their remuneration under the EEG.
Consideration was also given to the improvements in the framework conditions for the flexible operation of installations resulting from the amendments passed by the German Bundestag and approved by the German Bundesrat in the “biogas package”.
Keeping the same price ceilings for the biomass auctions creates enough scope to make participation in further auctions economically viable.
In the case of the biomethane auctions, it will be necessary to assess the effects of last year’s increase in the price ceiling and the extension of potential bids to cover the whole of Germany, which still remain to be seen.
The increase in the flexibility markup envisaged in the biogas package for biomethane installations with highly flexible operation would, as soon as applicable, also mean a considerable improvement in economic efficiency.