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EU Warns German Energy Costs Will Keep Climbing

EU Warns German Energy Costs Will Keep Climbing
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Πεμ, 28 Νοεμβρίου 2013 - 18:01
Germany faces huge increases in the cost of electricity even if the new government sticks to pledges to slow the country's shift to renewable sources like wind and solar power, the European Union's energy chief said Thursday.
Germany faces huge increases in the cost of electricity even if the new government sticks to pledges to slow the country's shift to renewable sources like wind and solar power, the European Union's energy chief said Thursday.

His comments came a day after Germany 's biggest parties struck a deal to form a government that includes an agreement to overhaul the country's system of financial support for renewable energy. Germans pay among the highest electricity prices in Europe as a result of the policy, which threatens to undermine Europe 's largest economy.

Energy costs were a major issue in Germany 's elections in September and in five weeks of coalition talks necessitated by the failure of Chancellor Angela Merkel's Christian Democrats to secure a parliamentary majority.

The coalition deal with the left-leaning Social Democrats foresees an expansion of renewable energy to between 40% and 45% of electricity by 2025 and to 55% to 60% by 2035. It includes reductions to some subsidies for green energy.

European Commissioner Guenther Oettinger said Germany 's next government appears to be "heading in the right direction," but he expects it will have make adjustments down the line.

"I'm concerned that the cost increases will merely be confined," Mr. Oettinger said at an energy conference in Berlin . "I consider the plan to expand renewables to over 50% a significant cost driver."

 Germany is replacing its nuclear reactors and most fossil-fueled power plants with renewables like wind and solar. The country is promoting the process through lucrative subsidies, which are passed onto consumers. In 2013 alone, Germany 's renewable energy subsidies are expected to amount to some 20 billion euros ($27.2 billion).

At present, Germany produces just under a quarter of its electricity with wind, solar, hydro and biomass power plants. It seeks to raise that to 80% by 2050.

The coalition agreement, which is subject to approval by the members of the Social Democrats, also includes plans to scale back the expansion of wind power. Starting in 2018, Germany plans to switch to an auction model that will grant subsidies only to the most cost-efficient renewable projects.

Environment Minister Peter Altmaier Wednesday said that the plans are clearly "not an acceleration" of Germany 's green energy push.

"The signs of the times are not pointing toward acceleration," Mr. Altmaier said.

Like many of its European neighbors, Germany is scaling back financial support for renewable energy for fear of losing its competitive edge over global rivals like the U.S. , whose energy costs are declining due to the vast volumes of shale gas produced domestically.

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