EEG Directe Vermarkting

EEG Directe Vermarkting

The EEG (Erneuerbare-Energien-Gesetz) direct marketing refers to the process where energy generated from renewable sources is sold directly on the market. This can be done via a Power Purchase Agreement (PPA) or other marketplaces.

Even though it's called "direct marketing," most operators/owners delegate this task to a specialized company, a "direct marketer." The operator/owners receives payment from the direct marketer, who sells the electricity on the exchange. Since exchange revenues usually don't cover installation costs, a market premium is also paid. The operator receives a combination of the exchange selling price and the market premium, minus the direct marketer's commission.

New plants that were put into operation on or after 1 January 2016 and have an installed capacity of at least 100 kW must market their electricity directly (Section 20 EEG 2021). In addition, these systems must be remotely controllable. Existing plants can easily switch to direct marketing and return to the usual remuneration model on a monthly basis.

• Small renewables-based installation (less than 100 kilowatts) do not have to market the electricity themselves. They receive remuneration fixed by the state – say 12 cents per kWh.
• If an operator who has to market his electricity directly only gets 4 cents per kWh on the exchange, he will be at an obvious disadvantage. That is why those marketing their electricity directly are entitled to a market premium. It offsets the gap between the average price on the exchange and what is called the “value to be applied”. This value is – simplifying it slightly – comparable to the fixed remuneration set by the state, but it is now (since the beginning of this year) no longer being set by government, but determined by auctio. If the value to be applied is also 12 cents per kWh, the market premium will offset the difference between that and the 4 cent price on the exchange, i.e. the premium will be 8 cents.
• Since the calculation of the market premium is based on the average monthly price on the electricity exchange, those who are good at marketing their electricity directly and deploying their installation can earn more than the 12 cents: if a particularly large quantity of electricity is in demand on a certain day, so that the prices on the exchange go up, the person selling his electricity on that day will profit. But the opposite is also true: those who sell their product when the price on the exchange is rock bottom earn less. The intention is to encourage the installation operators to align their electricity production with actual demand.

Also, the intention is to make the system easier to plan: what renewable energy installation will be delivering how much electricity and when? Such forecasts are important for a stable grid, but entail higher costs for the installation operators – e.g. for the precise evaluation of weather data. For this reason, the “value to be applied” of 12 cents in the example above also contains a “management premium”. It offsets some of the costs relating to direct marketing.

Renewables contribute to a secure electricity supply

The direct marketing system means that installation operators generating electricity from renewables have the same responsibility as the operators of conventional power stations: they make a reliable prediction of the amount they will produce and have an incentive to align their output with demand, for example by switching off or cutting back their output when prices are negative. In this way, they contribute to a stable electricity grid and a secure supply – and thus to the success of the energy transition.

It is also interesting to note that France has also had a law on direct marketing of electricity generated from renewables since 2015. The commonalities and differences between the two countries are identified in the current background paper by the EPEX SPOT electricity exchange and the Franco-German Office for the Energy Transition.