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Germany’s abandonment of nuclear power is facing increasing obstacles. The rating agency Moody’s has warned Europe’s electricity and gas suppliers about downgrading their creditworthiness due to growing political risks. This means that German energy companies which are supposed to make the switch to renewable energies are having increasing difficulties to get raise money on the capital markets. At the same time, the expansion of renewable energies has made only little progress.

After the nuclear disaster in Japan in March, Chancellor Angela Merkel (Christian Democratic Party, CDU) had called the switch to alternative energies a “huge opportunity”. Eight months later, the issue has slipped far down the political agenda as the political parties are blocking key laws.”The many fragments that have been legislated at the federal and state level must now be brought together,” demanded Hildegard Müller, chief lobbyist from the industry association BDEW.

Federal and state governments are divided about the question, which should carry the burden of the proposed tax benefits for the people and companies that increase the energy efficiency of their buildings. A first attempt by the Conciliation Committee to resolve the dispute failed. On the crucial issue of energy efficiency, the federal government is divided: The Free Democrats (FDP) reject an ambitious EU proposal, which would provide mandatory targets. At the same, German states develop energy plans – but uncoordinated.” Next year, we need a script for the energy transformation,” said Mueller.

Fritz Vahrenholt, CEO of RWE’s renewable division, warned against the “danger of blackouts” given the rapid shutdown of many German nuclear power plants and pointed to rising energy prices and the growing import of nuclear power. At the same time, the nuclear energy phase-out also removes a source of revenue for investments in green power for energy suppliers. Lack of electricity grids are further slowing down the development of renewables; delays are caused by bureaucratic procedures and citizen protests.

The situation is critical for wind energy, which plays a central role in the energy concept of the government. On Wednesday, the electricity network operator Tennet, which has to wire all offshore installations in the North Sea, warned that to wire dozens of wind farms at a same time, as planned, would fail due to “lack of financial, human and material resources of all involved”, as it is written in an urgent letter to the Chancellor’s Office, the Economic and Environment Ministries. “The conditions have to be substantially revised and the burden has to spread over more shoulders.”

Tennet estimates that investments of 5-6 billion Euros are needed over the next ten years. The company wants, among other things, to extend the target deadlines: currently, it must add a wind farm to the grid within 30 months after approval, which fails regularly. Installation vessels as well as sufficient suppliers of sea cable are lacking. The construction of wind turbines is getting delayed too – banks shy away from financing the 1.5 billion-Euro projects.

The financial strength of the energy industry, meanwhile, is disappearing fast. The valuation of the companies with the lowest A-level “A3” is at risk, according to Moody’s. So far, RWE, E.ON and EnBW still have this investment-grade and are considered as prime borrowers. However, the nuclear phase-out and fuel taxes increase the burden on their balance sheets.

What is more, the industries of the future suffer: Almost all solar companies are deep in the red, wind turbine manufacturers complain about lack of demand and are reporting growing losses. The stock index Renixx, which lists 30 international Greentech companies, has lost 56 percent since the year-high in April.

Wissen.de, 16 November 2011

Transl. Philipp Mueller