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26/08/2016

Berlin, EU at odds over surcharges in renewable energy reform

Sustainable Dev.

Berlin, EU at odds over surcharges in renewable energy reform

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Germany’s Economy Ministry has said it is at odds with the European Union over how to reform the country’s renewable energy law, and Brussels is questioning the entire principle of supporting green energy through surcharges.

Germany has until Tuesday (24 June) to rework its green energy reform plan to accommodate EU demands that it conform to the bloc’s competition laws. Berlin appeared to have reached an agreement with Brussels over exemptions that protect some heavy industrial users of power from a renewable energy surcharge paid by other consumers.

However, according to a economy ministry memo circulated late on Monday, new sticking points had arisen with the EU, including a demand by Brussels that power imported from abroad be exempt from the surcharge.

“This line of argument has only just appeared, and calls into question the entire principle of supporting green energy through surcharges,” the ministry wrote.

It said, however, that it would be prepared to compromise on other demands by Brussels, including higher surcharges for companies that produce energy in their own power stations. A quarter of industrial power is produced this way.

Subsidised renewable energy, led by wind and solar power, have sparked a political debate in Germany over high power prices for consumers, who pay mandatory charges for green energy.

Energy-intensive industries have been exempt or have enjoyed large discounts, something they say they need to remain competitive.

Under the reform plans, green subsidies will be scaled back and upper limits placed on onshore wind power expansion, solar and offshore wind plants. From 2017, green energy producers will have to compete more with conventional power generators.

Plans to wean European industrial powerhouse Germany off fossil fuels, accelerate a nuclear phase-out and embrace green energy are being closely watched around the world.

Background

In Germany, around 2,000 heavy industrial energy users such as BASF and ThyssenKrupp have been exempt from a surcharge ordinary consumers have to pay for renewable energy.

The value of the exemption - in effect a subsidy - will rise to €5.1 billion in 2014 from last year's €4 billion, even though the scheme is subject to a probe by the European Commission.

Brussels said the discount might sometimes be justified to keep energy-intensive firms in Europe, but it had concerns that aspects of the German law distorted competition.

Germany signalled its readiness to restrict the subsidies to some extent, but has made clear it wants to shield its industry from high power costs to help keep it competitive. 

Germany is undergoing Europe's deepest energy transformation as it exits nuclear energy. The biggest task facing the new government is a reform of the law on renewable energy.