Bloomberg News

Merkel Says Renewable Producers Should Pay More for Grid Upgrade

June 12, 2013

Chancellor Angela Merkel said renewable power producers should be forced to pay more for supporting upgrades of Germany’s electricity grid, signaling “substantial” changes ahead for the nation’s clean energy law.

Germany’s leader said she’s in favor of keeping a lid on the cost of electricity as the nation closes its nuclear reactors over the next decade, which will require changes to the EEG clean-energy law. She said the rules should be amended so that wind turbines are added in locations where they produce electricity more efficiently.

“I don’t want to give up the priority feed-in” for renewables, Merkel said at a conference in Berlin today. “It will, however, become necessary for those who get renewable energy subsidies to participate more in grid expansion, overall supply, storage development and similar things, whcih means we need an integration of the energy system.”

The comments indicate the depth of the government’s concern about rising power prices less than four months before federal elections scheduled for Sept. 22. Consumers in Europe’s biggest economy have seen power bills climb this year after a fee they pay for renewables jumped 47 percent to a record.

While all of Germany’s major parties agree that the energy law must be changed, they differ on exactly how to engineeer the shift away from nuclear power and toward tripling the share of renewables in the power mix by 2050.

Legal Change

The EEG needs to be “urgently” changed, and a new government must start implementing changes early next year, Peter Terium, chief executive officer of RWE AG (RWE), Germany’s second-largest utility, said at the same conference.

Talks between her government and state leaders on proposals to stop power prices from rising broke down in April, delaying more concrete steps from being taken until after the election.

Merkel’s government wants more efficient gas-fired plants to back up wind turbines and solar panels, which don’t generate round- the-clock supplies, although her comments today indicated she’s looking for a way to reduce fossil fuels over the longer term.

The chancellor expressed concern that a glut of carbon emissions permits in the European Union’s market is creating “total distortions” in the market that are benefiting coal-fired power stations over cleaner ones that use natural gas. While her government hasn’t agreed a position on how to reduce the glut, she said the idea that coal benefits “can’t be right in the long term.”

To contact the reporters on this story: Stefan Nicola in Berlin at snicola2@bloomberg.net; Tino Andresen in Dusseldorf at tandresen1@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net


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