Table of Contents. The Authors 3. List of Abbreviations 17. Acknowledgements and Preface 19. General Introduction 21. Chapter 1. General Background 21

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1 The Authors 3 List of Abbreviations 17 Acknowledgements and Preface 19 General Introduction 21 Chapter 1. General Background GEOGRAPHY AND POPULATION LEGAL AND POLITICAL STRUCTURE 22 I. Germany s Territorial Organization 22 II. Germany s Political Structure 23 III. Germany s Legal Structure 24 A. Division of Competences between the Federation and the German States 24 B. Legislation 24 C. Executive 28 D. Public Law and Private Law 28 IV. Sources of German Energy Law 29 A. The Basic Law for the Federal Republic of Germany 29 B. Statutes and Codes 29 C. Ordinances 30 D. Statutes (Satzungen) 30 E. Court Precedents 30 F. EC-Law 31 G. International Treaties ECONOMIC CHARACTERISTICS SOCIAL AND CULTURAL CHARACTERISTICS 33 5

2 Chapter 2. Basic Principles of Energy Law GENERAL BACKGROUND ENERGY SCENARIO RELEVANT LEGISLATIVE ACTS EUROPEAN ENERGY PACKAGES FUNDAMENTAL PURPOSES OF GERMAN ENERGY LAW 37 Chapter 3. Historical Background and Development of Energy Law 39 Chapter 4. Role of Government Institutions in the Shaping and Administration of Energy Law and Policy OVERVIEW REGULATORY AUTHORITIES (BUNDESNETZAGENTUR/ LANDESREGULIERUNGSBEHÖRDEN) 41 I. Federal Network Agency (Bundesnetzagentur) 41 II. Regulatory Authorities of the Federal States 43 III. Division of Tasks 44 IV. Abuse Proceedings According to the EnWG 44 A. Overview over Abuse Proceedings According to the EnWG 44 B. Basic Principles 45 C. Specific Abuse Proceedings Pursuant to Section 31 EnWG (Besondere Missbrauchsverfahren) 46 D. Proceedings Pursuant to Section 65 EnWG (Allgemeines Aufsichtsverfahren) 46 E. Proceedings Pursuant to Section 30 EnWG FEDERAL MINISTRY FOR ECONOMIC AFFAIRS AND ENERGY CARTEL AUTHORITIES FURTHER AUTHORITIES 49 I. Bundesamt für Strahlenschutz 49 II. DEHSt 49 III. Deutsche Energie Agentur (DENA) 50 IV. Monopolkommission 50 6

3 Chapter 5. Role of Municipalities and Municipal Energy Supply Companies MUNICIPALITIES AND THE GERMAN ENERGY MARKETS LEGAL RESTRICTIONS FOR MUNICIPAL ENERGY SUPPLY COMPANIES PROSPECTS 54 Chapter 6. Energy Concept Chapter 7. The German Energiewende (Energy Package 2011 and Subsequent Developments) 59 Part I. Regulatory Framework for Electricity 63 Chapter 1. General Introduction ELECTRICITY SECTOR IN GERMANY REGULATORY FRAMEWORK CONCERNING ELECTRICITY IN GERMANY 66 I. Overview 67 II. Background 69 A. Development of the German Electricity Sector 70 B. European Influences Introduction Steps of Electricity Sector Reform in Europe Key Elements of the Restructuring Process Competition in Generation and Supply Unbundling Opening of the Market Development of a Regulatory Framework Developments with Regard to the Electricity Sector in Germany 84 III. Energy Industry Act (Energiewirtschaftsgesetz - EnWG) 85 A. Content/Overview 85 B. General Provisions 85 C. Unbundling 86 D. Regulation of Grid Operation 86 E. Energy Supply to End Consumers 89 F. Plan Approval Procedure/Use of Infrastructure 90 G. Authorities 90 H. Procedure 91 IV. Renewable Energy Sources Act (Erneuerbare-Energien-Gesetz - EEG) 91 7

4 V. Act on Combined Heat and Power (Kraft-Wärme-Kopplungsgesetz - KWKG) 92 VI. Power Grid Expansion Act (Energieleitungsausbaugesetz - EnLAG) 92 VII. Ordinance on Grid Connection of Power Plants (Kraftwerks- Netzanschlussverordnung - KraftNAV) 93 VIII. Regulation on General Conditions for the Grid Connection and Use for the Electricity Supply in Low Voltage (Niederspannungsanschlussverordnung - NAV) 94 IX. Regulation on General Conditions for the Universal Supply of Domestic Customers and the Substitute Supply with Electricity from the Low Voltage Grid (Stromgrundversorgungsverordnung - StromGVV) 94 X. Ordinance on Incentive Regulation (Anreizregulierungsverordnung - ARegV) 94 XI. Ordinance on Concession Fees for Electricity and Gas (Konzessionsabgabenverordnung - KAV) 95 XII. Grid Expansion Acceleration Act (Netzausbaubeschleunigungsgesetz Übertragungsnetz NABEG) THE INSTITUTIONAL FRAMEWORK 97 Chapter 2. The Production of Electricity REGIME OF AUTHORIZATIONS GRID CONNECTION 99 I. Introduction 99 II. Section 17 Energy Industry Act 100 III. Grid Connection of Offshore Wind Turbines (Sections 17a et seq. EnWG) 101 IV. Grid Connection of Power Plants 102 Chapter 3. Transport ELECTRIC WIRES SUBJECT TO A PLAN APPROVAL PROCEDURE, SECTION 43 ENWG 108 I. Scope of Section 43 EnWG with Regard to Power Lines 108 II. Plan Approval Procedure and Plan Approval Order 109 III. Overview on the Material Requirements 111 IV. Legal Effects of the Plan Approval Order 112 V. Plan Approval Permit 113 VI. Legal Protection for Parties Affected by the Plan Approval ELECTRIC WIRES NOT SUBJECT TO A PLAN APPROVAL PROCEDURE 115 8

5 3. USE OF INFRASTRUCTURE: CONCESSION AGREEMENTS 115 I. Use of Infrastructure 116 II. Concession Agreements 116 III. Concession Fees 118 Chapter 4. Distribution 119 Chapter 5. Consumption DOMESTIC CUSTOMERS AND SPECIAL CUSTOMERS GRID CONNECTION AND USE IN LOW VOLTAGE 121 I. Section 18 EnWG 121 II. NAV UNIVERSAL SERVICES 123 I. Sections 36 and 38 EnWG 123 II. StromGVV STANDARD BUSINESS TERMS MEASURING ENERGY STORAGE 127 Part II. Regulatory Framework Concerning Gas 131 Chapter 1. General Introduction IMPORT OF GAS MARKET STRUCTURE COMPETITION PROSPECTS 135 Chapter 2. Production FEDERAL IMMISSIONS CONTROL ACT: REGULATORY MECHANISM AND DEFINITIONS NECESSITY OF A PERMIT MATERIAL PREREQUISITES FOR A LICENCE 140 I. Principle of Protection 141 9

6 II. Principle of Precaution 144 III. Principle of Waste Avoidance and Clearance 146 IV. Principle of Effective Use of Energy 146 V. Maintenance 146 VI. Other Material Preconditions LICENSING PROCEDURE 148 I. Formal Procedure under Section 10 BImSchG 148 II. Simplified Procedure LEGAL EFFECTS OF A PERMIT 150 I. Approval for Construction 151 II. Concentration Effect 151 III. Exclusion of Private Claims 152 IV. Subsequent Measures SPECIAL FORMS OF A LICENCE 154 I. Partial Licence 154 II. Advance Notice 154 III. Permission of Early Start 155 IV. Major Alterations MATERIAL PRECONDITIONS FOR FACILITIES NOT SUBJECT TO A LICENCE LEGAL PROTECTION 156 I. Legal Protection for the Operator against Denial of the Licence or Detrimental Collateral Clauses 156 II. Legal Protection for Third Parties 158 Chapter 3. Exploitation FIGURES: DOMESTIC PRODUCTION AND IMPORT OF GAS MINING LAW 160 Chapter 4. Transport ORDINANCE ON HIGH-PRESSURE GAS PIPELINES ENVIRONMENTAL IMPACT ASSESSMENT 163 Chapter 5. Distribution OVERVIEW AND HISTORY OF GAS REGULATION

7 2. UNBUNDLING ACCESS TO THE GRID 166 I. Grid Access According to Section 20 Paragraph 1b EnWG 166 II. Regulation on the Access to Gas Supply Grids (GasNZV) 167 A. Overview of the Rules on Access to the Gas Grid 168 B. Capacity Management 169 C. Reduction of Market Areas 170 D. Balancing 171 E. Storage, LNG and Production Facilities 172 F. Change of Supplier and Role of the Federal Network Agency 172 III. Grid Fees, Incentive Regulation BIOGAS 174 I. Rules Promoting the Use of Biogas 174 II. Connection with the Grid and Grid Access for Biogas 175 Chapter 6. Consumption GRID CONNECTION AND USE IN LOW PRESSURE UNIVERSAL SERVICES 180 I. Sections 36 and 38 EnWG 180 II. GasGVV PRICES 181 Part III. Regulatory Framework Concerning Petrol 183 Chapter 1. Production 184 Chapter 2. Exploitation 185 Chapter 3. Transport (German Petroleum Stockpiling Act) 186 Chapter 4. Distribution 187 Chapter 5. Consumption (Renewable Energy in the Transport Sector) EUROPEAN DIRECTIVE 2009/28/EC QUOTA OBLIGATIONS FOR BIOFUELS UNDER GERMAN LAW

8 Part IV. Regulatory Framework Concerning Coal 193 Chapter 1. Production SPATIAL PLANNING NECESSITY OF A PERMIT UNDER THE FEDERAL IMMISSIONS CONTROL ACT CARBON CAPTURE AND STORAGE CLIMATE PROTECTION UNDER THE FEDERAL IMMISSIONS CONTROL ACT 198 Chapter 2. Exploitation STATE SUBSIDIES FOR DOMESTIC HARD COAL PRODUCTION 200 I. Historic Development of Hard Coal Subsidies 201 II. Cessation of Subsidies by the Hard Coal Funding Act in MINING LAW 202 I. Scope of the Federal Mining Law and Types of Mineral Resources 203 II. Mining Rights 204 A. Exploration Licence 204 B. Production Licence 204 C. Mining Proprietorship 204 D. Application for a Mining Right, Further Rights Based on a Licence 205 III. Operating Plans 206 A. Framework Operating Plan 207 B. Main Operating Plan 208 C. Special Operating Plans 208 D. Final Operating Plan 209 E. Approval of Operating Plans 210 IV. Mining Supervision 212 Chapter 3. Transport 213 Chapter 4. Distribution 214 Chapter 5. Consumption 215 Part V. Regulatory Framework on Renewable Energy 217 Chapter 1. Introduction

9 1. FACTS AND FIGURES DEVELOPMENT OF THE RENEWABLE ENERGY SOURCES ACT ENERGY CONCEPT AND RENEWABLE ENERGY EUROPEAN LAW ON RENEWABLE ENERGY 221 I. PreussenElektra Decision 222 II. European Directive on the Promotion of the Use of Energy from Renewable Sources 223 A. Concrete and Binding Obligation to Reach a Certain Share of Renewable Energy in the Energy Mix 224 B. Flexibility of the Member States in Choosing the Support Mechanism 224 C. Cooperation of Member States in Reaching the Renewable Energy Targets 225 D. Sustainability Requirements for Biomass Used as a Renewable Energy Source 227 III. New Questions on the Compatibility of the EEG with European Law DISCUSSION ON ELECTRICITY PRICES EEG AMENDMENT IN I. Expansion Corridor 230 II. Coercive Direct Marketing 231 III. Tender Procedures 232 Chapter 2. Overview of the German Renewable Energy Sources Act (EEG 2012) AIMS OF THE RENEWABLE ENERGY SOURCES ACT, SCOPE OF APPLICATION REGULATORY MECHANISM: GRID CONNECTION, TAKE-OFF AND PAYMENT OBLIGATIONS, EQUALIZATION SCHEME GRID CONNECTION AND TAKE-OFF OF ELECTRICITY FROM RENEWABLE SOURCES PAYMENT ACCORDING TO FIXED FEED-IN TARIFFS 239 I. Principles of Section 16 EEG II. Technical and Operational Requirements, Feed-In Management 240 III. Calculation and Reduction of Tariffs and Bonuses 242 IV. Tariffs Paid for Electricity from Several Installations DIRECT MARKETING

10 6. EQUALIZATION SCHEME 246 Chapter 3. Wind Energy CONSTRUCTION OF WIND POWER PLANTS 250 I. Onshore Wind Power Plants 250 II. Offshore Wind Power Plants TARIFFS GRANTED UNDER THE RENEWABLE ENERGY SOURCES ACT 257 I. Onshore Wind Energy Plants 257 II. Offshore Wind Energy Plants 260 Chapter 4. Hydropower 262 Chapter 5. Biomass CONSTRUCTION OF BIOMASS POWER PLANTS TARIFFS GRANTED UNDER THE RENEWABLE ENERGY SOURCES ACT 266 I. Basic Feed-In Tariffs for Biomass 266 II. Bonuses 268 III. Sustainability Requirements for Biomass 269 Chapter 6. Solar Energy CONSTRUCTION LAW FOR PHOTOVOLTAIC INSTALLATIONS INSTALLATIONS ATTACHED TO OR ON TOP OF BUILDINGS UNDER THE EEG OPEN AREA INSTALLATIONS UNDER THE EEG 275 Chapter 7. Renewable Energy Sources in the Heat Sector 278 Part VI. Interaction between Energy Law and Environmental Law 281 Chapter 1. Overview of Relevant Statutory Sources 282 Chapter 2. Emissions Trading BACKGROUND GERMAN LEGISLATION ON EMISSION TRADING

11 Chapter 3. Cogeneration 288 Chapter 4. Energy Efficiency ENERGY-SAVING STATUTE AND ENERGY-SAVING REGULATION STATUTE ON ENERGY SERVICES AND OTHER ENERGY EFFICIENCY MEASURES 291 Part VII. Interaction between Energy Law and Competition Law 293 Chapter 1. Overview of the Relevant Statutory Sources 294 Chapter 2. Overview of European Competition Law with Regard to the Energy Sector BAN ON CARTELS, ARTICLE 101 TFEU PROHIBITION OF ABUSIVE PRACTICES, ARTICLE 102 TFEU MERGER CONTROL 297 Chapter 3. Act against Restraints of Competition (GWB) RELATIONSHIP BETWEEN GWB AND ENWG PROHIBITION OF AGREEMENTS RESTRICTING COMPETITION PROHIBITION OF ABUSIVE PRACTICES MERGER CONTROL 301 I. Principles of Merger Control 301 II. Ministerial Authorizations CARTEL AUTHORITIES, SANCTIONS AND MEASURES MONOPOLIES COMMISSION 305 Selected Bibliography 307 Index

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