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Germany

German ruling coalition strikes deal on biomass fuel expansion

Party leaders from the "grand coalition" government have reached an agreement concerning the expansion of biofuels. The move clears the way for the planned reform of the Renewable Energy Act (EEG) in 2017.

Leaders of Germany's three ruling parties agreed in principle late on Wednesday to a reform of Germany's renewable energy law, coming to terms for the first time on upper limits for government-supported biomass energy, as Germany seeks new rules to slow the spread of renewables and keep consumer costs under control.

Chancellor Angela Merkel of the Christian Democrats, Social Democrat leader Sigmar Gabriel, and Merkel's Bavarian ally Horst Seehofer of the CSU reached this agreement, albeit delaying several others, in talks on Wednesday night.

A reformed Renewable Energy Act (EGG) governing the expansion of renewable energy in Germany is due to come into effect in 2017. Under the deal reached between the SPD and CDU/CSU, biomass energy production will be expanded by 150 megawatts in the first three years after the law takes force, and then by 200 megawatts in the following three years.

The Bavaria-based CSU appeared to be pleased with the deal, calling the agreement both an important step in reforming Germany's energy law and also a clear commitment to biomass, which is imporant in Bavaria. The state had hoped for 250 megawatts.

Generous subsidies for green power have led to a

boom in renewable energy,

such as wind and solar power. But the rapid expansion has pushed up Germany's electricity costs and placed a strain on its grid.

The deal comes a day after German Chancellor Angela Merkel

hammered out an agreement with state premiers

designed to curb costs and somewhat slow the expansion of Germany's green energy sector, which continues to grow.

One of the biggest sticking points in the talks were plans to limit the amount of onshore wind power, with critics saying that would endanger Germany's long-term energy goals and put jobs in the sector at risk.

Under the planned reforms, Berlin agreed to limit its expansion of onshore wind capacity at 2.8 gigawatts per year, which equates to around 1,000 wind turbines' output. Owing to delay in the construction of cables to transport power south, only 60 percent of the new wind capacity will be allowed to be built in the north of the country, as part of a bid to avoid overburdening Germany's power grid.

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bw/msh (dpa, Reuters)

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