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Germany to Cut Renewable Energy Support to lower consumer electricity bills

Plans are to build more coal and gas plants

Martin Lynch (European News Editor) — May 8, 2013 — Industrial Info Resources

Germany, one of Europe’s strongest supporters of green energy, is facing an overhaul of its renewable energy act that will see subsidies for renewable energy projects cut and more gas-fired power plants constructed.

German chancellor, Angela Merkel, has announced that she wants to see a reduction in the feed-in-tariffs (FiTs) paid to renewable projects in order to reduce the cost to the government and lower consumers’ electricity bills. At a recent Frankfurt conference she claimed the country needs a more balanced energy mix through the use of more conventional power plants based mainly on gas.

“We have to think about how to slow down the dynamics so that we get a sensible expansion of renewable energies but not a situation in which no gas-fired power plant can be operated profitably anymore and each gas plant has to be subsidized so it provides baseload capacity,” Merkel explained.

Merkel is echoing much of what Germany’s Federal Environment Minister, Peter Altmaier, called for in March when he received broad support for an overhaul of the renewable energy act, or the EEG. Merkel said that “in the coming months and at least one to two years” the government has to find a way to change the EEG law on subsidies.

Merkel wants to avoid voter backlash in the coming elections in September. German citizens have seen their electricity bills jump in recent years thanks to an increasing renewable energy charge. Merkel hopes that calling for cuts in renewable subsidies will keep voters on her side.

Merkel’s government made the knee-jerk decision in 2011 to abandon nuclear power following the Fukushima Dai-ichi nuclear disaster in Japan. It has shut a number of older plants already but it wants all 17 of its reactors offline by 2022.

Before Fukushima, Germany was getting around 22% of its power from those 17 nuclear reactors. Following the closure of the oldest eight reactors, that share has dropped to around 16%. Germany is facing an energy crisis in the coming decade once all of those pants are shut down. The government has admitted that it needs up to 20,000 megawatts (MW) of additional fossil-fuel powered plants built by 2020 – that’s double its previous estimate of 10,000 MW. For additional information, see June 16, 2011, article – Germany Needs 20 Gigawatts of Fossil-Fuel Power Plants.

However, the high price of gas and the low cost of cheap coal imports from the U.S. is making the construction of gas-fired plants unattractive to many energy companies in Germany, and Europe, as a whole.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info’s quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what’s happening now, while constantly keeping track of future opportunities.

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  1. Germany to Cut Renewable Energy Support to lower consumer electricity bills | ajmarciniak - May 8, 2013

    […] Germany to Cut Renewable Energy Support to lower consumer electricity bills. […]

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