BERLIN: Chancellor Angela Merkel’s cabinet approved yesterday a reform of Germany’s renewable energy law designed to curb a rise in the cost of electricity in Europe’s biggest economy driven by the rapid expansion of green power.
The reform will slow the growth of green energy, which accounts for 25 percent of Germany’s electricity, and force new investors in green power to take some risk.
Although some industrial companies will have to pay more for power in future, the sector has managed to hang on to many of the benefits it says it needs to stay competitive. Household consumers, who have among the highest electricity bills in Europe, are likely to see power bills rise at a slower pace.
The blueprint is a victory for Economy and Energy Minister Sigmar Gabriel. He had to balance maintaining growth in renewables with the requirement to keep heavy industry happy with affordable power.
“Some 100 days after the start of the new government we have given the energy shift a new start,” Gabriel told reporters.
He stressed that he had seen it as his task to make sure Germany protected jobs by preserving its industrial base.
Although Berlin is reducing exemptions from a surcharge which finances green subsidies and are granted to industry, the sector’s contribution will stay roughly the same, he said.
Gabriel has also had to accommodate the interests of the European Commission and Germany’s 16 states, which have differing energy priorities.
Germany’s shift to green energy and away from nuclear power and fossil fuels is one of conservative Merkel’s flagship policies but the cost of ballooning subsidies has threatened to undermine it.
Under the draft law, the government plans to increase the share of renewable sources to 40-45 percent of total electricity production by 2025 and to 55-60 percent by 2035. This is needed to offset the elimination of nuclear power by 2022.
It will scale back green subsidies and upper limits will be placed on onshore wind power expansion (at 2.5 gigawatts in capacity per year), photovoltaic (2.5 GW per year) and offshore wind plants (6.5 GW to 2020).
From 2017 green energy producers will have to compete more on the market with conventional power generators. The draft is due to become law in August.
Since Merkel decided to speed up Germany’s nuclear exit after Japan’s 2011 Fukushima disaster, the energy shift has taken on a new importance.
Environmental group BUND criticised the plans, saying they would slow the ‘green revolution’ and they favoured industry.
“Merkel and Gabriel are handing out gifts to companies at the cost of ordinary citizens,” it said in a statement.Reuters
