German energy meeting identifies power gap-sources

Reuters News
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Posted: May 02, 2012 4:28 PM
German energy meeting identifies power gap-sources

By Vera Eckert

BERLIN (Reuters) - Germany's accelerated nuclear exit and its increased reliance on renewables is likely to cause a power gap equivalent to the output of up to 15 plants by 2020, participants at a high-level energy meeting agreed on Wednesday, according to sources.

The meeting hosted by Chancellor Angela Merkel and attended by leading energy executives reached no decisions on how to fill the shortfall, the sources told Reuters.

"It was agreed that by 2020 there will be a capacity gap of 10 Gigawatts," one source told Reuters after the meeting. This is the rough equivalent of 10 and 15 power plants.

Merkel met with chief executives of utilities E.ON, RWE AG, municipal utilities as well as representatives from Siemens AG, power network operators, trade unions, and energy lobbyists.

Her decision last year, following the Fukushima disaster in Japan, to shut down more than half a dozen older nuclear plants and phase out nuclear power completely within a decade has thrown big utilities on the defensive and sparked a debate about how best to replace inexpensive, around-the-clock nuclear power.

Another meeting with German state premiers is due to take place on May 23 and will focus on grid expansion and increasing the use of offshore windpower, the sources said.

Oppositions parties have criticized Merkel for failing to deliver a coherent post-nuclear energy strategy, and the meetings reflect her government's desire to show progress is being made ahead of a federal election next year.

Industry leaders have said there need to be more incentives to invest in flexible gas-fired power plants to fill supply gaps when weather is unfavorable for wind or solar energy, or when industry and consumers require power at peak-use times.

Since Germany switched off a large slice of its nuclear power supply last year, there have been a number of incidents when wind from the north could not be transported quickly enough to consumers in the south due to a lack of grid infrastructure.

Hildegard Mueller, the head of Germany's main energy lobby BDEW, said there had been consensus at the meeting that existing power stations needed to stay in place while at the same time new plants needed to be built.

However, sources said no decision had been reached on how to balance the two.

"On the one hand, this has to be about being able to run existing power plants profitably in the future," Mueller said. "On the other hand it is important to develop carefully further measures for the necessary new constructions," she added.

Many energy executives have signaled they are angry that billions of euros are being poured into subsidizing renewables to create a decentralized power generation structure instead of funding the infrastructure.

(Reporting by Vera Eckert, Tom Kaeckenhoff, Andreas Rinke, writing by Annika Breidthardt; Editing by Noah Barkin)