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German Ministries Clashing Over Renewable Subsidies

German Ministries Clashing Over Renewable Subsidies

German Economy Minister Philipp Roesler stepped up demands for extra cuts to subsidies for wind and solar power providers, aggravating a clash with his Environment Ministry Cabinet colleague over the nation's energy overhaul.

Roesler, who leads Chancellor Angela Merkel's Free Democratic junior coalition partner, wants to go beyond Environment Minister Peter Altmaier's proposals to reform clean-energy support laws, a paper obtained by Bloomberg News shows. The document said that renewable-energy providers should carry more market risk and so curb the cost to the state of Germany's transition from atomic power. It didn't give specific numbers for subsidy cuts.

Altmaier, a member of Merkel's Christian Democratic Union party, foresees a reduction of 1 percent to 1.5 percent in the so-called feed-in tariff that owners of renewable-power generators receive as he seeks to shift some of the cost to producers from consumers to stem a surge in electricity prices. His plan is due to be discussed with state environment ministers on Feb. 14.

"Roesler welcomes Altmaier's plans for a reform of the renewable-energy law, but also said that additional measures are necessary to lower electricity prices," Felicitas Hoch, an Economy Ministry spokeswoman, said by telephone today. "The Economy Ministry is taking part in this debate on further measures and the paper has to be seen against this background."

The Economy Ministry paper proposes that new renewable-energy plants, with the exception of "small" providers, should not profit from feed-in tariffs. Subsidies for on-shore wind energy should be lowered, while compensation for producers switching off their generators when power grids lack capacity should also be reduced, according to the paper, which was passed to the Environment Ministry Feb. 8.

Internal Discussions

The government denied that there was a clash between the ministries. "We have always said that the proposal of an electricity-price break made by Altmaier will be discussed within the government," Steffen Seibert, Merkel's spokesman, said at a regular government press conference in Berlin today.

Germany is adding wind and solar parks to its power-generation capacity after Merkel's 2011 decision to shutter all nuclear plants by about 2022 following the Fukushima disaster in Japan. With national elections on Sept. 22, Merkel's coalition is looking for ways to limit electricity price rises associated with the shift while keeping their commitment to an unprecedented overhaul of the energy market in Europe's biggest economy.

The opposing ministry stances "are yet more proof of the incapability of the Merkel government to find sustainable solutions in the energy policy turnaround," Hubertus Heil, general secretary of the main opposition Social Democrats, said in an e-mailed statement.

Copyright 2013 Bloomberg

Lead image: Roof with solar panels and German flag , via Shutterstock

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