UPDATE 3-Brussels, Berlin still at odds over green energy law

July 3, 2014 by  
Filed under Green Energy News


* Competition chief gives no figure on possible back payment

* EU states mustn’t discriminate against energy imports

* Commission says solution possible this month on new law

* Deeper enquiry into previous German law will take time

(Adds reaction from Merkel, German lawyer, Commission
background)

By Barbara Lewis

BRUSSELS, July 3 (Reuters) – Berlin and Brussels clashed
over Germany’s green energy law on Thursday, with Chancellor
Angela Merkel reacting angrily to suggestions from Europe’s
competition chief that Germany had not done enough to comply
with European rules.

A ruling from the EU’s highest court on Tuesday raised hopes
in Germany that its revamped renewables legislation – which aims
in part to shelter heavy industry from the cost of funding green
energy – was already in line with EU law.

But EU Competition Commissioner Joaquin Almunia said that
was not the case, because imported energy would not be treated
in the same way as domestically-produced fuel.

“Imported electricity cannot be given discriminatory
treatment,” Almunia told reporters. “We need to find with the
German authorities a good way to eliminate our concerns.”

Merkel hit back, saying the Commission had created a degree
of insecurity, which she would fight “with all (her) power”.

The Commission should show understanding of Germany’s
difficulties as it seeks to reform a 15-year-old subsidy system
and bring it more into line with markets, she told a meeting of
her Christian Democrat party’s economy committee in Berlin.

The European Commission, the EU executive, announced late
last year it was launching a full investigation into Germany’s
renewables law.

That inquiry is likely to be lengthy and Almunia said he had
not ruled out that German industry would have to pay back
subsidies it received under the old regime, although he did not
give any figures.

Finding a solution to the Commission’s problems with the
revised German green energy law should be quicker.

Almunia said it was possible that could be achieved before
the Commission’s summer break, which begins on Aug. 1, but he
added: “It’s not in my hands.”

TECHNICAL ISSUES

The issues at stake are technical and concern the extent to
which subsidies are allowed for green energy, as well as how to
prevent discrimination against imported renewable energy.

Tuesday’s ruling from the EU’s top court found Sweden’s
renewable support scheme to promote national green power was
compatible with EU law, even though Sweden had refused to
provide support for non-domestic green power.

German Economy Minister Sigmar Gabriel welcomed that ruling,
saying it had removed any lingering EU obstacles to Berlin’s
renewable energy law.

Almunia said he took the ruling into account, but it was
distinct from the situation in Germany, where green power is
being imported and treated differently from domestically
produced green energy because of the way levies are distributed.

If consumers have to pay a surcharge on both domestic and
imported electricity but revenue from the surcharge is used only
to finance domestic electricity producers, the Commission says
imported electricity may be disadvantaged and made comparatively
more expensive.

Matthias Lang, partner at law firm Bird Bird in
Duesseldorf, said he agreed with Almunia that the German
government and industry still had legal issues to solve over
subsidies and exemptions handed to German industry from payments
to support green energy.

Germany, Europe’s biggest electricity market, borders nine
countries and is a net exporter of power, although it imports
some green energy, which Almunia estimated at less than 10
percent of the total.

Renewable power in Germany has become a political
battleground as heavy industry, which uses very large amounts of
power, some of which it produces itself, says it will cease to
be competitive if it has to contribute as much as other users to
subsidising development of renewables.

“When there is a national problem, it is very easy to blame
Brussels,” Almunia said.

(Additional reporting by Vera Eckert in Frankfurt and Stephen
Brown and Andreas Rinke in Berlin; Editing by Dale Hudson and
Mark Potter)

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