German chancellor merkel lobbied to ease renewable aid cuts

BERLIN -- Chancellor Angela Merkel’s planned revamp of the German energy industry may crimp the onshore wind expansion that’s key to her unprecedented switch from nuclear to renewable power sources, the country’s top wind state said.

Schleswig-Holstein, a region of 2.8 million people that borders Denmark, is pressuring Merkel’s government to accept a more generous target for land-based wind installations and give developers more time to claim the current, higher subsidies, said the state’s Prime Minister Torsten Albig.

“Onshore wind is the cheapest and most developed renewable source and can help” reduce the cost of Merkel’s plan to raise the share of renewables in the power mix to 80 percent by 2050 from about a quarter now, Albig said in an interview in Kiel. “That’s why we so vehemently support it.” The region last year added the most onshore wind capacity of all 16 German states.

From Schleswig-Holstein in the far north to Bavaria on the Alpine rim, German states are jostling to slow plans hatched in January to lower aid for new clean-power projects. Merkel says the “Energiewende,” or energy switch, is her most important project and has set a deadline for April 8 to get states and industry to back a bill setting new subsidies and capacity caps in a major overhaul to the 14-year-old EEG law.

‘De-Industrialization’

So far, Economy and Energy Minister Sigmar Gabriel hasn’t budged on his proposals for new tariffs or capacity targets, Albig said. Gabriel said in January that Germany risked “de- industrialization” unless electricity costs are cut. The country’s consumer power bills are the highest in the 28-state European Union behind Denmark, according to Eurostat data.

Squabbling over the costs of expanding renewable energy may jeopardize the core aim of Merkel’s energy switch -- phasing out nuclear plants operated by EON SE, RWE AG and EnBW Energie Baden-Wuerttemberg AG by 2022. That deadline may have to be postponed to help reduce energy costs, Peter Ramsauer, chairman of the parliament’s Economic Committee, told Der Spiegel this week. Albig said Ramsauer’s comments are “irresponsible” as nuclear power is expensive and is “killing people.”

The government’s proposal to cap onshore wind installations at 2.5 gigawatts a year should not include projects to replace older turbines, the so-called repowering, because doing so would lead developers to rush through projects, Albig said. Developers should also be able to claim the current aid if they connect their projects to the grid by year-end, from the current proposal of Aug. 31, he said.

Tariffs Cut

Merkel aims to slash feed-in-tariffs across all renewable sources to 12 euro cents a kilowatt-hour on average by 2015, from the current 17 euro cents, according to an Economy Ministry document. New onshore projects in northern Germany may get as little as 6 euro cents under the new plans, Deputy Economy Minister Rainer Baake said March 17.

Germany added a record 3 gigawatts of onshore wind last year, including 766 megawatts of repowering according to the BWE industry group. Schleswig-Holstein accounted for 14 percent of the domestic market and hopes that an increase in offshore wind installations will be a boon to its ports including Buesum and Brunsbuettel.

Merkel’s government needs to voice “a clear commitment” to offshore projects that have been derailed by insecurity over future aid, Albig said. It’s “very questionable” that Germany can reach its new, lower target of 6.5 gigawatts of sea-based turbines by 2020 with current proposals, he said.

Merkel and Gabriel have invited Albig and the 15 other state premiers to discuss the reform on April 1, Sueddeutsche Zeitung reported today. Albig said he’s “confident” that an agreement can be found soon.

Copyright 2014 Bloomberg

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