Historical institutionalist perspective on the shift from feed-in tariffs towards auctioning in German renewable energy policy

Abstract

An early implementer of feed-in tariffs, Germany soon became feed-in champion, continuously resisting pressures – from the European Commission in particular – to adopt a competition-oriented approach. The European Commission never approved of the German feed-in tariff, seeing it as illegal state aid. However, after the good results in deployment of renewables, other countries followed suit and feed-in tariffs became the most popular support scheme for renewables in Europe. Despite this success, the nature of the Energiewende changed. Germany broke with its feed-in tradition two and a half decades later, introducing pilot auctions for solar energy in 2014. In 2016, it moved from a scheme under which every provider of renewable energy was entitled to support to a competition-oriented approach based on auctioning. Drawing on perspectives of historical institutionalism and adopting qualitative methods, we argue that the success of the feed-in tariff in terms of deployment of renewables altered coalitions of interests in Germany. The German government introduced auctioning with a view to controlling cost developments and protecting the conventional energy industries from insolvency. This happened under considerable EU pressures, given the European Commission’s state aid guidelines, which prescribe a competition-oriented approach.