Bloomberg News

Merkel Tightens Grip on Energy Overhaul as Progress Lags

May 21, 2012

German Chancellor Angela Merkel is tightening her grip on the biggest energy overhaul in the country’s history, assigning a party enforcer to speed the transition amid signs her 12-month-old policy shift has stalled.

Peter Altmaier, the chief whip and deputy floor leader of Merkel’s Christian Democratic Union, tomorrow is set to take the environment minister post. The following day he’ll begin negotiating with leaders of Germany’s states at a meeting with Merkel after they rejected a government bill in the upper house that would have cut solar-power subsidies by a record this year.

“The German energy transformation is seriously lagging behind,” Lutz Mez, a political scientist focused on energy policy at Berlin’s Free University, said in a telephone interview. “The government sowed insecurity when it comes to supporting renewables with its solar aid cuts and failed to boost energy efficiency. Peter Altmaier will have to come up with fresh solutions very quickly.”

One year after Merkel abandoned her support for atomic power in favor of shifting to renewable sources in response to the tsunami and nuclear disaster at Fukushima, she’s taking greater control of the historic switch planned for Europe’s biggest energy market.

Altmaier said via Twitter on May 18 that he wouldn’t make a public statement before he takes the new job.

Altmaier ’Unbiased’

That the nomination of Altmaier brings the energy plan closer to the chancellery is “undisputed and urgently necessary,” Georg Nuesslein, an energy spokesman for the Christian Social Union, the CDU’s Bavarian sister party, said by telephone. “It’s an advantage that Altmaier enters the ministry unbiased as there are many different interests at play.”

Germany is set to miss its target to build 10 gigawatts of offshore wind farms by 2020 amid delays in connecting the turbines to the power grid, the wind industry has said.

EON AG and RWE AG (RWE), the country’s biggest utilities, have threatened to halt investment unless the delays are resolved. They’re also refusing to build new gas-fired generators, deemed key by the government to back up the fluctuating renewables, as the fuel’s rising cost and the specter of Europe’s second recession in three years threatens to wipe out potential returns.

Altmaier, 53, and a regular user of Twitter, will be in charge of plans to shutter the country’s remaining nine nuclear reactors by 2022, build offshore wind farms that will cover an area six times the size of New York City and erect power lines that could stretch from London to Baghdad.

Solarworld Versus Consumers

In doing so, he has to balance the interests of companies such as Solarworld AG (SWV), the country’s biggest solar-panel maker, with those of consumers, whose power bills may increase as renewables comprise a greater share of production. He also faces calls to solve delays in connecting sea-based wind turbines to the power grid, find ways to store the fluctuating renewable energy output and soften planned cuts to solar subsidies.

“The energy transformation is a societal challenge and an important task on whose successful implementation hinges much for consumers, the economy and above all the environment,” Altmaier told reporters in Berlin on May 16, as he was named to the post.

Altmaier succeeds Norbert Roettgen, who was fired by Merkel the same day after leading her CDU to its worst-ever result in Germany’s most populous state. Before the dismissal, Merkel talked to industry officials including Hildegard Mueller, the head of the BDEW utility lobby, who complained that Roettgen didn’t listen to her over the energy transition, the best- selling Bild newspaper reported May 18, without saying where it got the information.

State Leaders Pressuring

A close confidante of Merkel, according to Bild, Altmaier is facing calls to give greater support to the solar industry amid pressure from state leaders.

His portfolio changes are “an opportunity to link the nuclear exit to restructuring the solar industry and offensively develop solutions for that,” the Mitteldeutsche Zeitnung newspaper cited Reiner Haseloff, the CDU prime minister of Saxony-Anhalt state, as saying in its May 18 edition.

State governors including Haseloff voted on May 11 to renegotiate a bill backed by Merkel and Roettgen that would have cut solar subsidies, saying the move threatened thousands of jobs in the world’s biggest solar market by installed capacity. The bill was sent to a parliamentary panel for arbitration.

Green Concerns

“I’m concerned that we as the world’s fourth-biggest economy are failing to move forward with the energy transformation,” Cem Oezdemir, the co-leader of the Green Party, told ZDF television on May 18. Altmaier should take back the planned cuts to solar subsidies “so that the industry has a chance to adjust,” he said.

Germany has boosted the share of renewables in the power mix to about 20 percent from about 16 percent in 2009. The number of jobs in the country’s clean-energy industry rose about 12 percent in two years, to 381,600 in 2011.

“Roettgen has been a strong supporter of the renewable energy industry and is the advocate of the nuclear exit,” Claudia Kemfert, the chief energy expert at the Berlin-based DIW economic institute, said by e-mail. “I hope that Peter Altmaier continues to support this policy course.”

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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