Federation Of German Industry Calls For End Of Green Energy Subsidies
Germany’s most influential business lobby demanded a radical overhaul of the country’s ambitious plan to shift to renewable energy in the coming years, warning that Chancellor Angela Merkel’s blueprint would undermine the economy and cost jobs.
The call by the Federation of Germany Industry, known as the BDI in Germany, came just days before national elections and appeared to be a warning to the next government that industry won’t accept the status quo.
Businesses have been complaining for months that the government’s so-called energy transformation—Ms. Merkel’s biggest domestic policy initiative of the past four years—is pushing up energy prices and costing German companies their competitive edge in global markets.
The plan involves phasing out the use of nuclear power and fossil fuels for generating electricity in the coming decades in favor of wind, solar and other renewable power sources.
The current framework “leads to costly inefficiency in the whole system and endangers the affordability of energy as well as Germany as an industrial base,” the BDI said.
Ms. Merkel, who is expected to remain chancellor after Sunday’s election, has acknowledged that there are problems with the present system—a complicated framework of tariffs and subsidies aimed at encouraging renewable energy production. But she has yet to offer proposals to improve it.
The BDI on Thursday proposed what it calls a “masterplan” under which guaranteed tariffs paid to suppliers of wind- and solar-generated electricity would be abolished.
It also called for setting up a strategic reserve of fossil-fuel power, which is needed to bridge periods when wind and solar energy aren’t in abundant supply.
Electricity prices have more than doubled in Germany since the nuclear power phaseout was initially agreed to in 2000. Power prices for industry have risen to €0.1487 (20 cents) per kilowatt-hour in 2013, from €0.0606 in 2000, while prices for private households climbed to €0.2873 from €0.1394 in 2000, according to Germany’s energy and water industry association, known as BDEW.