The figure compares to 22.3 TWh production expected to be sold directly on the market in 2023 amid around 235 TWh total production. The scenario also foresees that Germany would likely miss its 2030 renewables targets with onshore wind installation in particular consistently underperforming.

German RES generation forecast

In 2022, Germany issued about 28.8 TWh worth of GOs (having increased by 8.7 TWh compared to 2021) against a total renewable generation of 239.4 TWh. However, the country cancelled 146 TWh GOs last year (up 27% from 2021) maintaining Germany’s status of the largest GO consumer in the AIB.

The issuance of German GOs has not kept up with expanding renewables production due to a clause in the current legislation (EEG) that mandates that GOs can only be issued if the respective electricity does not receive government support (feed-in tariffs or market premiums).

Nevertheless, power producers in Germany have the option to exit their support scheme and sell their production on the spot market (unsupported direct marketing) and in this case also benefit from GO issuance. Plant operators can enter, leave and re-enter the aforementioned two markets on a monthly basis.

Older operators that have reached the end of their feed-in-tariff scheme (or 

) that have bought such facilities to repower) would also be entering the market if they have not secured a Power Purchase Agreement (PPA) or decided to shut down operations.

More and more German renewables producers are choosing the direct marketing approach, according to a local market source, amid attractive prices on both the wholesale electricity market as well as the GO market. A GO price of around EUR 5-5.20/MWh drew the initial interest in but even GO levels around EUR 3-4/MWh would remain attractive for direct marketers, according to the source.

While the EU Wind and EU Solar 2023 vintages have dropped closer to EUR 4/MWh in recent sessions amid bearish short-term fundamentals, vintages further out on the curve have maintained levels above EUR 5/MWh, according to Veyt closing prices.

The report also suggests that German 2030 onshore wind capacity targets are unlikely to be met with the technology reaching just under 77 GW in 2028 under the trend scenario. This compares with a government target of over 100 GW in the same year. 

 are key obstacles delaying project implementation.

German RES installed capacity

 initiative launched by the government and the country’s 16 states aims to deal with those obstacles as in extreme cases projects have faced 94-month long waiting time.

 of transport permit application that will be managed by a central authority is also in the planning.

The Trend scenario also forecasts offshore wind and solar to reach 165 GW and 15.6 GW respectively by 2028. While these figures are broadly in line with previous interim targets, it still leaves a question mark over the viability of meeting the 2030 targets (30 GW offshore wind & 215 GW solar). 

Industry stakeholders have warned that the government needs to do more to ensure success, especially when it comes to 

 were successful, the industry is lobbying the government to update the offshore wind law ahead of the next auction rounds planned for 2024. Abolishing the uncapped bidding practice and aligning auctions’ qualitative criteria with the rest of Europe were among the suggestions which are also in line with the recently proposed 

The TSOs’ report confirms the expected trend of increased issuance of German GOs in the latter half of the decade due to the end of older EEG support schemes and favourable market conditions for RES producers in Germany by giving more exact indications of potential volumes.

While 60.5 TWh is a significant improvement in a market which tends to import the majority of its GOs, the demand side is also expected to keep growing.

Germany is regarded as a consumer-driven market and has historically had a higher consumer willingness to pay for renewable electricity. Local German GOs tend to trade around EUR 0.30-0.40/MWh above AIB price levels, according to the German market source.

Over the years there has been a continued increase in the number of utilities offering green tariffs and there has been a growing number of green electricity label offerings - a trend that is likely to continue. Medium-sized businesses are also looking to green their operations with GOs one of their options alongside PPAs.

The European Commission has previously approved a EUR 27.5 billion 

 to compensate energy-intensive companies for indirect emission costs. This can affect the willingness to pay for GOs by industries affected, partly because their ability to pay improves with the state aid and partly because redeeming GOs for 30% of their respective electricity consumption is an alternative condition to qualify for the state aid.

Having said that, German industry has been shaken by big names such as chemical giant BASF deciding to relocate to China. Economic minister Robert Habeck's proposed “bridge” electricity price of EUR 0.06/kWh to cover 80 % of the electricity needs of major energy consumers by 2030 was officially shelved. Instead, the government is going for a wider 

 of measures that focuses on electricity tax relief for two years and extention of existing CO2 cost compentation schemes. 

The longer term success of the measures is yet to be seen with the CO2 cost compensation especially controversial as it 

 companies to green their operations, nor does it improve companies' 

If the measures prove insufficient to keep German industry players from relocating away from Europe, then this is likely to have a significant bearish impact on the AIB market in the mid-term given the extra local supply of GOs expected.

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Our community offers access to webinars, discussions and updates from industry leading experts and analysts. 

Update: The market impact section has been updated to reflect the most recent government decision regarding support for the industry.

Around 60.5 TWh worth of GOs could be issued in Germany in 2028 or 16.5 % of the expected total renewables production in that year, according to a 

The Trend scenario assumes that combined renewables (hydro, biomass, onshore wind, offshore wind, solar) would produce around 366 TWh in 2028. Of these, 60.5 TWh would not receive any subsidies, therefore would be directly sold on the market and will be eligible to receive GOs. 

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UPDATED: German GO issuance to grow above 60 TWh in 2028, study

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