Thursday, September 26, 2013

German industry calls for reform of the renewables

Thursday, September 26, 2013
London-German Association has published a proposal for reform of the country's renewable energy strategy, calling it on the first 100 days of the new Government to be adopted.

Button, to the trade body plan strategies for elimination are the feed-in tariff (FIT) for renewable energy and instead market mechanisms determine its price procurement makes more reserve capacity and more closely matching German renewable energy policy with EU policies.

Reform of renewable energies has been a growing problem in Germany, but was essentially on hold in the run-up to the elections.

The cost of the energy transition

Chief among in the Association of the costs relating to the energy revolution are affecting German industry (BDI),. The BDI says the fit is simply too expensive, claims that the costs for the industry and consumers exceeded the already critical limits and endanger competitiveness. "The EEG [Germany's renewable energy law], with its guaranteed feed-in tariffs and priority access for renewables, can support not the needs of a generation power market with supply and demand structures. High system cost are the result,"the group said in its proposal.

German consumers and businesses pay to support a so-called EEG supplement of the country the aim of meeting 80 percent of its energy needs with renewable energy by the year 2050. BDEW, energy and water Association, predicted, will this cost 20.4 billion rise 14.1 billion to € this year from €.

While German households below the highest electricity prices in the EU (and prices rise again in 2014 laid down), industry, is also feeling the bite despite EEG additional exceptions to the value of over €4 billion for energy-intensive sectors. The exceptions were originally designed for a small number of companies, but current estimates of the number of exempted companies range from approximately 1700 to 4000, leads to public protest in Germany and an ongoing investigation by European antitrust regulatory authority provided.

"The EEG system has been carefully structured to keep the German economy competitive," said partner at the law firm Bird & bird in Dusseldorf and a senior author of the German energy blog, Dr. Matthias lang. "The Germans want renewable energy, but at the same time they want to be built yet her Mercedes here." "Is why we see certain exceptions, and the EEG premium and grid fees increased over the years due to substantial increase in has drastically their commercial relevance."

Remove is the exceptions for the industry the costs for energy transformation are even harder to bite, and major implications might be for renewable energy support policies, said long. "You take a column if all exemptions, either for reasons of politics or European law," he said, "then the whole system is at risk and that will be a big challenge." If this element of the renewable energy support system, which has more industry is no longer practicable, heart the interests then can create this is a big issue for renewable energy support as a whole."

Alignment with Europe

The BDI proposal, German renewable energy policy more closely with the European directives is based on infrastructure and legal concerns. Germany have overtaken the rest of Europe in the implementation of renewable energy does not necessarily a good thing, said long. "The European target is 20% by 2020; If you are 30 percent, have not that you are necessarily better — they meet not the goals. He said if a nation creates problems of others for all because it does more than the goals, then it may be according to European requirements".

In its investigation the European Commission "will look hard at what Germany is actually doing, and I suspect that we actually have some criticism from Brussels," he continued. "It's about what fits our energy policy in Europe. If we prepare raster extension here, maybe it would be better, the grid in France, Belgium, the Czech Republic, etc. to build there, '' he said. "We have cross-border problems now because of various environmental regulations in different countries, the problems for the German economy--to create, is why BDI is interested in." "What we need in Europe to fit, because German companies sitting on both sides of the border."

Election results are the key

German Chancellor Angela Merkel, on Sunday for a third term re-elected has pointed out that the reform of renewable energies is at work, but so far has no details offered, how it should be achieved. Her party has said that it wants to make renewable energy competitive to on the market without further government support; It wants more responsibility for the security of energy supplies renewable power generators. Depends what kind of policy reform will now take place on the parties a possible coalition Government with the center-left Social Democrats and the Green Party both take part in the race.

Once a Government is formed, long said, there is "a really long discussion, to work such as [policy reform]. The victorious coalition parties have some difficult decisions about the renewable energy support system. It won't be easy for either party, to make these decisions." Contribute to the discussion, new EEG supplement pay will be released on October 15.

"I can't tell where this is going," said long. "Merkel said two years ago that the EEG surcharge not over €3.4 cents rise; next year it may be twice as much,"he continued. "We are a new price tag for the surcharge in October; at the same time must have decided new Government where you bring the EEG system."

It is possible, long said that the new Government "have a first quick-shot reaction only with certain elements" of policy reform. "We have seen in the past, that a new Government with an initial response, and then something comes up that take longer," he said. "Fundamental reform will take longer."

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