Germany to cap green power subsidies paid by firms
Date: 10-Mar-03
Country: GERMANY
"Last night the ministries have fundamentally agreed that contributions from energy-intensive companies will be capped and that will happen very soon," the spokesman told Reuters.
Discussion between the ministeries now focussed on the question of the need for a German electricity market regulator.
Industries such as aluminium producers have blamed the government's green energy policy for their high electricity costs, which they say makes them less globally competitive.
The environment ministry supports the case for a regulating authority. It believes high costs stem from the lack of electricty market competition, rather than subsidies for green power.
The establishment of a regulatory body would be a U-turn for the government, which so far has opted for negotiated rather than regulated access to power and gas networks. All other European Union energy markets are overseen by state regulators.
German electricity consumers pay above-market rates for power from renewable energy producers under laws promoting the sector. Their total contribution is expected to amount to around two billion euros ($2.19 billion) this year.
For the base metal industry alone, this means additional costs of up to 20,000 euros ($21,940) per worker, its WVM association has said.
The ministerial talks are part of a wider reform of Germany's extensive provisions for renewable power going into the general grid under the Renewable Energy Sources Act of March 2000 (EEG), which is due to be passed by the end of this year.
EEG recognises that renewable power is not yet fully cost-effective but sees it is as politically desirable, because it is virtually free of greenhouse gas emissions, seen by many scientists as contributing to global warming.
Helped by EEG, power production from renewable energies rose by 18 percent to 45 billion kilowattt hours last year, the electricity industry association VDEW said in February.