The Bundesnetzagentur, Germany's Federal Grid Operator, has awarded 187,3 MW of capacity to biomass plants in the latest tender round. A total of 244 projects were awarded a subsidy spot. With this, Germany once again shows how seriously it is working on renewable energy from biomass.
The allocation is done via the EEG, the German legislative framework for renewable energy. Within this system, capacity targets are set annually. It is not about fixed subsidies per project, but about an auction system in which projects with the sharpest bids receive the support. In this way, the government wants to stimulate sustainable generation at the lowest possible social costs.
The selected projects consist of a mix of biogas plants and fixed biomass plants. They are spread across the country, which fits in well with the aim of more decentralised energy supply. A broad geographical spread also strengthens local energy security and makes regions less dependent on external energy sources.
A striking feature of this tender model is the application of the market premium model. Instead of a fixed fee for the generated electricity, operators receive a premium on top of the market price. This premium compensates for the difference between a predetermined fee and what they earn on the electricity market. This system makes it more attractive to produce efficiently, because the income is partly dependent on market performance.
The outcome of this tender underlines the importance of biomass within the German energy transition. With over two hundred projects now receiving support, it is clear that the sector continues to actively develop. At the same time, the model forces companies to remain focused on costs and innovation. Only those who can produce competitively have a chance of receiving support.
By using biomass in this way, space is created for a more sustainable energy system with more regional involvement. Germany uses market incentives to give direction to this development. How this policy develops in the coming years will determine the role that biomass ultimately continues to play in the European energy mix.
Source: Bioenergy insight, Photo taken with Ai
