UPDATE 1-EU to probe German renewable energy discounts -draft letter

December 13, 2013 by  
Filed under Green Energy News

* Industrial users given discounts on renewable energy

* EU to probe whether this constitutes state aid

* New govt has pledged to reform renewables law by Easter

* Commission may demand repayment of aid

(Adds background, detail)

By Markus Wacket

BERLIN, Dec 13 (Reuters) – The European Commission is
opening an investigation into the discounts German industries
get on renewable energy surcharges, according to a draft letter
sent to Berlin, which could lead to higher costs for thousands
of firms in Europe’s biggest economy.

Germany collects surcharges from power consumers to help
fund operators of wind and solar power plants. Heavy electricity
users such as cement, steel and chemical plants are exempt from
the surcharge to keep them from being priced out of the global

A draft letter from competition Commissioner Joaquin Almunia
to Berlin said the Commission would open a probe into whether
Germany’s policy distorts competition.

Some 2,300 companies are in the exemption scheme.

Angela Merkel is on the verge of securing a third term as
chancellor, should grass roots Social Democrats give a green
light to forming a coalition government with her conservatives
in a poll.

One of the new government’s top priorities will be a reform
of renewable energy law, which has sent households energy bills

A probe by Brussels has loomed for some time, and German
politicians had warned firms to set aside provisions. The
Commission can ask governments to recover aid granted to
companies if this is found to have breached EU rules.

Hans Juergen Kerkhoff, president of Germany’s Steel
Association, said the discounts did not constitute state aid but
merely served to balance out distortion in global competition.

(Writing by Alexandra Hudson; editing by Jane Baird)

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