Merkel’s Coalition to Slow Wind-Energy Expansion to Reduce Costs

November 11, 2013 by  
Filed under Green Energy News

Chancellor Angela Merkel’s third-term government will seek to slow the expansion of land and sea-based wind power to cut the cost of the country’s unprecedented
switch from nuclear energy to renewable sources.

Merkel’s Christian Democratic bloc and the Social Democrats
agreed in talks over the weekend to reduce the target for
offshore wind turbines to 6.5 gigawatts by the end of this
decade, and to 15 gigawatts by 2030, from 10 gigawatts and 25
gigawatts respectively. Negotiators also backed reducing aid for
onshore turbines and forcing owners of most new clean-energy
plants to sell power on the market.

Merkel has said the chief priority of her new government
will be to overhaul Germany’s 13-year-old EEG clean-energy
subsidy law that has helped land Germans with the second-highest
power prices in the European Union. Merkel, who will tomorrow
resume negotiations with the SPD aimed at forming a coalition by
Christmas, said in her weekly podcast that the EEG has led to a
“cost explosion” that must be tamed.

Revising the EEG “will be the central project of the grand
coalition,” Environment Minister Peter Altmaier told reporters
yesterday in Berlin after concluding the agreement with the SPD.
As a result, the energy switch will become “more predictable
and lastingly affordable,” he said.

Merkel has been looking for ways to reduce the cost of
adding renewable generators after deciding to close the
country’s nuclear power plants by 2022. German consumers and
companies finance clean-energy subsidies by paying a surcharge
on their power bills. The fee will jump 18 percent on Jan. 1 and
has more than quintupled since 2009.

Solar Subsidies

Negotiators also agreed to slow the expansion of biomass
energy, said they will leave subsidies for solar power unchanged
and will “review” aid to companies that use a lot of energy,
Dominik Geissler, a spokesman for the Environment Ministry, said
yesterday by text message. The industry aid had helped inflate
bills for private homes.

The two sides have already agreed to temporarily ban
fracking for unconventional natural gas until environmental
concerns are resolved.

While the new offshore wind targets correct “unrealistic
expectations,” the coalition seeks to add onshore wind turbines
where it’s windy to reduce the cost of the expansion, Altmaier
said. Surging energy expenses are threatening jobs and
investments, says Germany’s BDI industry federation, which
represents about 100,000 companies from Volkswagen AG (VOW) to Siemens
AG. (SIE)

To contact the reporter on this story:
Stefan Nicola in Berlin at
snicola2@bloomberg.net

To contact the editor responsible for this story:
Reed Landberg at
landberg@bloomberg.net

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