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Winds of change

Richard Fuchs / smsJanuary 31, 2014

Economy Minister Sigmar Gabriel will have to find common ground with the opposition to reform Germany's renewable energy laws. It will be a long process, as state governments take issue with subsidy cuts.

Wind turbines and solar cells in a German field Photo: picture-alliance
Image: picture-alliance

Acceptance was the key point Sigmar Gabriel, Germany's minister for economy and energy, had in mind when he announced his plans for a reform of the subsidies paid to renewable energy producers in the German parliament on Thursday (30.01.2014).

The public's acceptance will be critical for Germany to continue expanding the use of renewable sources of energy and phasing out nuclear power by 2020. But the public's agreement with the government's plans could dissolve quickly if electricity prices, which have been rising sharply, are not kept in check.

Gabriel calculated that private consumers currently pay 24 billion euros ($30.6 billion) in higher electricity bills per year to finance Germany's push to renewables. He said consumers could not be called on to pay any more but also added that energy-intensive companies needed protection from having to pay too large a burden or that Germany would face a "dramatic deindustrialization."

For Gabriel, the main issue was carefully controlling Germany's nuclear phaseout. Part of that includes reducing subsidies designed to promote the production of energy from renewable sources as well as placing targeted limits on the amount of renewable energy produced. Only by reducing the state financing of solar, wind and biomass power plants, the minister argued, could spiraling electricity costs be reduced.

Sigmar Gabriel speaking in parliament Photo: Wolfgang Kumm/dpa
Gabriel said he wants to form an 'energy consensus'Image: picture-alliance/dpa

Germany currently pays 0.17 euros per kilowatt hour from renewable sources, which Gabriel wants to reduce to 0.12 by 2015.

Blocking the expansion of renewables

Oliver Krischer, an energy expert for the Greens, said Gabriel's reform plans would lead to a dramatic slowdown in the creation of renewable energy.

"Putting a cap on renewables is a big mistake," Krischer said.

He added that the plan to limit the growth of new land-based wind power turbines was particularly misguided.

"I does not make sense to cap the cheapest form of renewable energy, which happens to be the cheapest form of all energy production," Krischer said, adding that he thought Gabriel's proposal would end up increasing - not decreasing - electricity costs.

Should Gabriel's plans be enacted, it would likely mean Germany could not meet the climate change goals it agreed to, the Greens politician said.

"What they are planning will make it so that renewables are even able to replace the energy produced by nuclear power plants taken offline," Krischer said.

Two wind turbines in a field Photo: Bahman Rafie
Land-based wind turbines are the cheapest way to produce electricity, Krischer saidImage: Bahman Rafie

Left Party politician and energy policy expert Eva Bulling-Schröter said this would mean that Germany would end up using brown coal to meets its energy needs. "We are flooding Europe with dirty power and the German government just watches," she said.

Gabriel said he understood the opposition's points. "I regard your criticism as constructive and will approach your suggestions in an equally constructive manner," he said. Though Germany's governing coalition does not need to rely on the opposition to pass bills in the Bundestag, the lower house of parliament, Gabriel will need some support from the Greens to get his plans approved by the upper house, the Bundesrat.

States battle for wind power

Some state leaders, including Gabriel's fellow Social Democratic Party members, were also critical of his plans. Northern German states took issue with reducing the renewable energy subsidy, while southern states opposed plans to limit support for wind energy to places with the highest winds.

Gabriel promised to draft an "energy consensus" between the federal and state governments. He is also under pressure from Brussels to get the reforms enacted before the 2014 summer break. The European Commission is currently investigating whether the lower rates paid by Germany's energy-intensive companies represent illegal subsidies. If Germany is found to be in breach of EU law, it could face numerous lawsuits and fines.