EU Coercion or Voluntary National Decision-making? The Shift towards Auctions in German Renewable Energy Policy

The German renewable energy policy development is a pioneering case. Germany has gained considerable attention since 2000, when the government introduced its plans for an energy transition. Already in the 1970s, the government introduced strategies for this ambitious transformation and have reinforced such strategies ever since. In order to make the transition happen, the government has introduced policy instruments such as a generous feed-in tariff. This policy instrument has been of global importance for the development of renewable energy technology and provision. Germany’s feed-in tariffs have received considerable attention as a role model to follow for other countries. However, in 2016 the government controversially decided to switch to auctions. This turn in German policy making was initiated at the same time as the European Commission changed its state aid guidelines in 2014. The new state aid guidelines prescribe a market-oriented approach, according to which feed-in tariffs no longer comply. Researchers studying renewable energy policies argue that the EU influences such support schemes in voluntary ways through the open method of coordination (e.g. Jacobs 2012). We assess to what extent voluntary and coercive mechanisms in the Europeanisation literature contributes to explain the shift in policy. Based on qualitative data, describing organisational and political factors, we argue that the European Commission has contributed to speed up the process of introducing market-oriented auctions for renewable energy support. In addition, due to increasing costs and big utilities’ insolvency issues, the political majority wanted to control the quantity of renewable energy development. Such domestic concerns are key in understanding why Germany introduced auctions.