date: august 2011

According to the legislator, there is in mostly no potential for the construction of new water power plants within the upper range of capacity. A possibility to increase the energy generation out of water power is the modernisation of already existing water power plants. The most important supporting instrument therefore is the Act on Renewable Energy Sources. But also the Federal Water Act is important for water power plants referring to planning permission and to environmental issues.

1. Support of water power

a) Act on Renewable Energy Sources (EEG 2009)

  1. Support of water power
    1. Act on Renewable Energy Sources (EEG 2009)
    2. EEG 2012
  2. 2. Authorisation requirements

The currently effective EEG 2009, in which the legislator had reworked the remuneration regulations concerning water power plants to large extents, has lead to serious problems concerning implementation within practise.

The remuneration regulation of § 23 sections 1 and 2 EEG differentiates water power plants into engine-power classes of up to 5 MW and more than 5 MW as different electricity generations costs exculpate this. Furthermore, the EEG grants a remuneration of 20 years as far as the water power plant has been modernised after 31 December 2008. For plants with an output of more than 5 MW only that share, that had been developed additionally because of the modernisation, is reimbursed according to the EEG 2009. Electricity out of storage power stations is excluded from the remuneration according to the EEG. There is also no degression on the remuneration of electricity out of water power up to 5 MW as the legislator does not foresee any potential to reduce costs.

In particular the requirements for an adequate modernisation in terms of the EEG, the existence und the proof of the creation of a good ecological condition are not finally clarified.

Within the last instance there is no decision whether the modernisation has to range over the plant on its own and has therefore to lead to an increase in efficiency of the plant or whether ecological provisions are adequate to fulfil this matter of fact concerning remuneration (for example: Regional Court of Hagen, decision of 26 November 2009, file number 10 O 57/09). The Clearingstelle EEG has concretised within a vote that the modernisation measure could than be assigned to the water power plant. Therefore, it would be necessary but also adequate that a spatial and operational connection exists and the modernisation measure could be imputed to the plant operator (Clearingstelle EEG, vote of 27 November 2008, file number: 2008/23).

The legislator gives rule examples in § 23 section 5 sentence 1 number 2 EEG, when an important improvement of the ecological condition is reached. The proofed improvement of the management on retaining capacity, of the biological patency, of the minimum water drain, the management on solid matters and shorelines shall normally lead to an improvement of the water ecology. From the point of view of the nature protection, the biological patency is of higher importance and is normally executed by the plant operator concerning the usage of remuneration. In which relation the rule examples are standing to each other, is not legally clarified yet. The remuneration of the electricity is not obligatory due to the formulation as a rule example, even if one of the mentioned measures had been executed. Insofar, an appraisal of the individual case is necessary.

The verification on the part of the plant operator concerning the production or the improvement of a good ecological condition as well as the substantive competence of the grid operator are currently leading to significant problems of application. Basically, the plant operator can provide evidence with the reconstruction of a water power plant due to the accreditation concerning the use of water power according to the Federal Water Act (WHG). When the plant is modernised, the plant operator can file an attestation of the responsible water authority concerning measures, which are subject to an attestation, with the grid operator. It would also be possible to let approval the requirements by an environmental verifier. It has to be questioned to what extent the grid operator is allowed to check the environmental certificate, which minimum requirements the environmental certificate has to fulfil and whether the remuneration requirements are still fulfilled when there is a negative notification of the water authority and a positive environmental certificate. The grid operator as well as the plant operator has a need for legal clarity, which can only be made up within the scope of an observation of the individual case.

Beside of the remuneration requirements concerning water power, the plant operator of a water power plant within an output of more than 100 kW has to equip its plant with a technical or operational attachment to remote-controlled reduce the fed-in power in case of grid congestion. The plant has also to be equipped with an attachment to call-up the actual feed-in to which the grid operator has access. Since 01 January 2011, this rule also applies to old plants. How these attachments have to be developed, is explained by the Clearingstelle EEG within the recommendation procedure 2010/5. Plants with an attachment like this participate in the feed-in management according to § 11 EEG 2009. In some cases, there had already been a regulation of water power plants so that they had been compensated by the grid operator, whose grid has caused the necessity of regulation, according to § 12 EEG 2009. Assigned problems of the plant operator for a too fast regulation of the water flow rate are not picked up by the EEG in the scope of the feed-in management.

Due to the relatively low remuneration for water power according to the EEG, the direct marketing of the electricity is particularly important for the cost-effectiveness. As a result of the possibility of a constant and permanent electricity supply, water power plants can achieve particularly high prices for the produced electricity on different electricity markets. Therefore, the strict requirements of § 17 EEG have to be fulfilled and power supply contracts, which are adapted to the kind of electricity production, have to be signed.

b) EEG 2012

According to the current state of knowledge, the legislator wants to execute an amendment of the EEG by 01 January 2012 that shall lead to a simplification of the remuneration regulations concerning water power plants. Up to now, the field report 2011 concerning the EEG, the draft bill of the Federal Environment Ministry and a government’s draft are available. According to this, the following changes can be assumed for water power plants.

The legislator intents to admit storage power stations to the matter of fact concerning remuneration due to their possible share to electricity feed-in in accordance with the demand. Within the EEG 2009, this kind of electricity production had been excluded from the support. Difficulties in classification of other water power plants might be solved this way. But there is one restriction: Remuneration should only come into consideration when the energy plant is installed at already existing reservoirs or storage power stations.

It is obvious until now that the remuneration levels will be unified whereby the maximum potential of one location shall be used. The differentiation into remuneration levels is not envisioned any longer. The partly requested support of small installation of up to 100 kW can not be found within the existing drafts.

The discussed criterion of modernisation is not admitted to the matter of fact concerning remuneration. But the increase in the capacity of the plant or the installation of a technical attachment concerning the remote-controlled reduction of the feed-in capacity is nominated as requirement.

The legislator wants to counter the problem of verification in the scope of modernisation by a compulsory verification of the water authority as far as the measure is subject to an accreditation. Measures, which are not subject to an accreditation and which are checked by an environmental verifier, can only lead to the matter of fact concerning remuneration by ballot with the water authorisation. There are concerns to some extend according to this regulation as the authorities are often unable to cope with numerous examinations that have to be executed.

Due to the reorganisation of the Federal Water Act in the year 2010, the rule examples of § 23 section 5 number 2 EEG 2009 and the existing problems in implementation shall be eliminated by a direct reference of the EEG to the Federal Water Act. The intended comprehension of photovoltaic plants into the feed-in management shall lead thereto, that the regulation of water power plants shall only be executed within a minor extent, also in consideration of the effects to the flow conditions.

The direct marketing, which is especially important for water power plants, has been reworked in an extensive way by the legislator. It aims for a production of electricity out of renewable energy sources, which is in accordance with the demand, due to special bonuses. For this, a market premium and a flexibility premium are discussed. The bonuses already have a high complexity in the current version, which needs to be checked by the plant operator as well as by the grid operator. When the requirements concerning the forwarding of data are not maintained, the drafts envision a reduction in remuneration on the real average of the month of the market value.

Whether the aim of a simplification of the matter of fact concerning remuneration can be achieved by using the suggested measurements has to be questioned regarding the reference to the new Federal Water Act. Furthermore, the direct marketing, which is especially important for water power, is very complex so that numerous problems in use have to be faced.

2. Authorisation requirements

The approval right for water power plants acts in accordance with the legislation of the EU, the federal law in the shape of the Federal Water Act and certain regulations of the Federal States.

Within the scope of the EU-legislation, the so called “Wasserrechtsrahmenrichtlinie” is especially important. It has become effective on 22 December 2000 and shall promote the harmonisation of the water protection. Until December 2015, the aims of a good condition within the surface waters shall be fulfilled. The direction is the starting point for the Federal Water Act, which had been enacted in June 2002 and which had ascribed numerous regulations to the legislators of the Federal States.

The use of a water for the production of energy is always subject to an approval or a permission according to § 8 of the amended Federal Water Act, which became effective on 01 March 2010, as far as no exceptions are explained explicitly within the law. In this connection, numerous exceptions from old rights and competences are allowed according to § 20 WHG. The objective plants had to exist on the area of the former GDR on 01 July 1990 or at another point in time that had been determined by the Federal States. Only such plants are existing that allow for the practice of the old law. It is not sufficient when the plant is totally degenerated whereas the necessity of minor repair works are not opposing (see Higher Administrative Court of Bavaria, decision of 04 December 1963, DVBl. 1965, 43). The legislator has also developed the possibility within § 20 section 2 WHG to revoke rights and competences when a damnification of the general welfare is due.

Water power has been incorporated and regulated within § 35 WHG for the first time with the reorganisation of the Federal Water Act. The rule had been changed in many cases and had been subject to important discussions. The inclusion aims to intend a balance between the use of waters for the production of renewable energy and the protection of waters as a natural living environment for flora and fauna. To which extent the regulations of the federal law will push the state-specific rule aside, is not clarified in a global way yet. It has to be checked within the individual case whether the regulations of the federal law have a closing character and a deviance of the Federal States is not accessible. Approvals under federal state law continue to have legal effect according to § 20 section 1 number 4 WHG.

The basic requirement for the accreditation of a new water power plant is according to § 35 WHG that suitable measures concerning the protection of the fish stocks are taken. It is legally not clarified and left open by the legislator which concrete demands are made concerning this aim. Furthermore, in the scope of a proportionality test it has to be examined, whether the consequences of water power use conciliate with the energy generation and the interest on cost-effectiveness of the plant operator. Also existing areas have to fulfil these requirements concerning the protection of the fish stocks after granting of a fair transition period. For existing plants it has to be checked preliminary to the beginning of possible measures, whether an existing unlimited approval becomes meaningless due to a modernisation or rather the water authority can only grant a limited approval.

Furthermore, water power plants have to guarantee the environmental control of surface waters according to § 32 WHG, the minimum flow conditions according to § 33 WHG and the patency of surface waters according to § 34 WHG as a special kind of management. When these requirements are not fulfilled, it is an absolute reason for a denial within the procedure of permission, planning approval and planning permission. Furthermore, the general principles of water management according to § 6 WHG have to be fulfilled by the plant operator, which call for a sustainable water management in due consideration of the efficiency and the capacity as a part of the ecosystem and living environment of flora and fauna.