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Bavarian Govt: Germany’s Renewable Energy Costs A Threat To Economic Growth

Vera Eckert, Reuters

The German state of Bavaria will press the federal government to reduce supports for renewable energy, a high-ranking local policymaker said on Tuesday, calling the cost of green power a threat to economic growth.

“We have to step on the brakes of electricity costs. Germany’s energy transition must not become a decisive disadvantage and a risk to our welfare,” said Ilse Aigner, deputy prime minister of the south-western German state and minister for energy.

Aigner’s views matter because Bavaria has to be in line with Germany’s overall energy goals and her party, the Christian Social Union (CSU), has leverage over Chancellor Angela Merkel’s coalition government, led by the CSU’s bigger sister party, the CDU.

She could therefore influence a federal debate planned for this autumn, after the Berlin government settled a number of energy-related disputes in July.

Critics say that the 21 billion euros ($23 billion) that German industrial and household consumers pay annually to subsidise green energy, largely through surcharges under the renewable energy act (EEG), slow competitiveness and spending in the broader economy.

Reform measures are due to be agreed by mid-2016, ushering in renewable energy tenders instead of fixed prices from 2017.

Renewable energy already amounts to over 25 percent of the national electricity mix, driven by the political desire to move to a low-carbon economy.

In Bavaria, it is 30 percent and growing, thanks to a high sun intensity encouraging photovoltaics, as well as hydroelectric, biomass, and geothermal industries.

Bavaria’s industry leaders, including heavyweights such as BMW and Siemens, say high electricity prices already hurt them as well as neighbouring Austria, whose power market is aligned with Germany’s.

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