Germany Can’t Bear $32 Billion-a-Year Green Costs, Minister Says

January 22, 2014 Leave a comment

Germany Can’t Bear $32 Billion-a-Year Green Costs, Minister Says

Germany must reduce the cost of its switch from atomic energy toward renewables to protect growth, Economy and Energy Minister Sigmar Gabriel said.

German companies and consumers shoulder as much as 24 billion euros ($32 billion) a year for renewables because of subsidy payments, Gabriel told an energy conference in Berlin.“I don’t know any other economy that can bear this burden,” Gabriel said today. “We have to make sure that we connect the energy switch to economic success, or at least not endanger it.” Germany must focus on the cheapest clean-energy sources as well as efficient fossil-fuel-fired plants to stop spiraling power prices, he said.

Chancellor Angela Merkel has made the top priority of her third-term government, which took office last month, reforming clean-energy aid after rising wind and solar costs helped send consumer bills soaring. Germans pay more for power than residents of any European Union nation except Denmark.

While renewable aid costs are at the “limit” of what the economy can bear, Germany will keep pushing wind and solar power, the most cost-effective renewable sources, Gabriel said. Biomass energy is too expensive and its cost structure hasn’t improved, he said.

Gabriel, who last month assumed control of the biggest energy overhaul of any developed country, is overseeing the shuttering of Germany’s atomic fleet by 2022, ordered by Merkel after the Fukushima nuclear disaster in Japan.

He will seek to limit subsidies paid to operators of land-based wind turbines to no more than 9 euro cents a kilowatt-hour in 2015 and reduce the expansion to about 2,500 megawatts a year, according to a ministry document prepared for a meeting of Merkel’s coalition on Jan. 22-23. Developers will get paid subsidies at the current rate if their units are authorized before tomorrow and enter operation this year.

While Germany seeks to limit increases in energy prices, the government can’t promise that bills will decline, Gabriel said.

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

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