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Electricity Feed Law or Renewable Energy Feed-In Tariffs
by Paul Gipe

Copyright 2001 by Paul Gipe. All rights reserved. This essay may not be copied or circulated without express permission.

May 23, 2001

Electricity Feed Laws or Renewable Energy Feed-In Tariffs (REFITs) permit the interconnection of wind and solar generators with the grid. They also define how much each form of generation is paid. In the American context, Electricity Feed Laws are like PURPA (the Public Utility Regulatory Policies Act), only with a price.

The concept is extremely simple. In Germany, for example, anyone--except the electric utilities or their subsidiaries--owning a wind turbine was paid 90% of the retail or consumer rate. If consumers were paying 10 cents/kWh in a region, a farmer owning a wind turbine was paid 9 cents/kWh for every kWh generated.

The German EFL or Stromeinspeisungsgesetz was changed in 1999 (published in 2000). The new law fixed both the payment and the number of years during which the owner would receive payment under the program. Owners of wind turbines are paid about 10 cents/kWh, owners of solar photovoltaics are paid about 50 cents/kWh. In the year 2000 France became the latest European country to adopt the Feed Law concpet. The French Feed Law (published in 2001) employs a two tier system to adapt the German model to French conditions. The French approach may be suited to North America because it limits the size of wind projects that qualify and it uses a method to calculate what is the optimum payment shoud be. The calculations should warm the heart of  even the most hard-headed economist. We hope to have an English translation shortly.

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18 November 2001
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