| BERLIN, April 8
BERLIN, April 8 The German government will give
its blessing on Tuesday to a sweeping reform of renewable energy
laws designed to slow cost increases as Europe's largest economy
moves to nearly double its green power share to 45 percent by
Chancellor Angela Merkel's cabinet will adopt reforms to put
the 'Energiewende', or transition to renewable energy, on a
sustainable path as Germany attempts to wean itself off of
nuclear energy and fossil fuels without killing off industries
The reforms will slow the rapid expansion of green power,
which already accounts for 25 percent of Germany's electricity;
force new investors in green power to take some risk; and
protect households from bearing the brunt of future cost rises
by forcing industry to pay more.
Merkel has made the overhaul of renewable energy laws a
centre-piece of her four-month-old 'grand coalition' government,
saying its passage into law, due in August, is urgently needed
to keep power prices from spiralling out of control.
The reforms are a collection of compromises that analysts
say should slow the rise in household power prices, which are
among the highest in Europe, at the expense of causing pain to
some companies and to the renewable energy sector.
Germany's wholesale electricity prices are among the lowest
in Europe thanks in part to a surge in wind, solar and biofuel
capacity in recent years. The boom in renewables also helped
drive down wholesale prices in Europe as Germany has become a
major exporter of green electricity.
Existing green power plants are exempted from the reforms,
which will put new upper limits on on-shore wind power expansion
(at 2.5 gigawatts in capacity per year), photovoltaic (2.5 GW
per year) and offshore wind plants (6.5 GW to 2020).
The government plans to increase the share of renewable
sources to 40-45 percent of total electricity production by 2025
and to 55-60 percent by 2035. This is needed to offset the
elimination of nuclear power by 2022.
Economy Minister Sigmar Gabriel has negotiated exemptions in
Brussels that will continue to shield some heavy industrial
users of power from a renewable energy surcharge, which adds 6.3
cents per kilowatt-hour to the power bills of ordinary
He plans to cut the number of companies exempted from the
surcharge to around 1,600 from Germany's 2,100 biggest users.
"The expansion of the number of companies exempted was too
much. We have to reduce that," said Gabriel, who has managed to
cut through the resistance from lobbyists that plagued his
Despite fears that the European Commission would thwart the
exemptions, Gabriel has helped ensure that the remaining 1,600,
such as BASF and ThyssenKrupp, are likely
to continue to be exempt, saving them some 5.1 billion euros per
The final details still have to be worked out with Brussels,
but Competition Commissioner Joaquin Almunia has said he is
confident the new German laws will conform with EU guidelines.
His intervention means that all EU member states should get
a chance to support their own transitions to green power by
exempting industries from renewable energy surcharges.
Consumer advocates say too much of the burden falls on
private customers, whose bills have gone up by 60 percent in the
past 10 years.
(Writing by Erik Kirschbaum; Editing by Vera Eckert and Jane