German government, industry to study greener power future

Reuters News
Posted: Jun 27, 2012 8:38 AM
German government, industry to study greener power future

BERLIN (Reuters) - Germany's Environment minister said the state will help set the ground rules for the country's shift to more renewable power resources but will leave the details of how to implement it to market forces.

Speaking at a power conference in Berlin on Wednesday, Peter Altmaier told the meeting that the government would only intervene when necessary.

"We will have to decide on (five to six) central points that are binding and then we will see a dynamism and synergies that we at this stage cannot even imagine," he said.

"The energy shift has to be put in practice in decentralized places but we need to establish decisive cornerstones at a macroeconmomic level."

Earlier, Hildegard Mueller head of the energy industry association BDEW, called for a unified power market by 2015 at the latest to help Europe's biggest power consumer manage its move to a more greener energy mix.

"After the 2011/12 winter, the priority is to safeguard supply in the 2012/13 winter," Mueller said.

Mueller added that the BDEW was talking about a "strategic reserve for a few years" and a long-term market design by 2015.

"We need a solution by 2014/15 at the latest," she said. "We need to start turning the plan into legislation by then, otherwise we will not realize it, given the long lead times."

The country, which uses 600 terawatt hours a year, narrowly escaped a blackout in February because it was without nuclear power while green solar and wind power were also unavailable.

Germany switched off 40 percent of its nuclear capacity in one go last year after Japan's Fukushima crisis.

The energy regulator has identified some power stations that can help to plug supply gaps next winter before new capacity comes on stream.

After the coming winter's short-term measures, these should be changed and monitored by power grid companies and their regulatory agency to become an instrument for the long term, Mueller said.

One consequence of a shift towards temperamental wind and solar power is volatile production. To offset output gaps, policymakers are discussing whether to build conventional round-the-clock power plants and pay standby premiums in what is referred to as a capacity market.

This could help to deal with the problem of low power prices discouraging the building of new plants. The financial crisis and low demand in the euro zone have sent German wholesale power prices to 19-month lows.

The government expects a parliamentary mediation committee to seal a compromise on Wednesday night about the reduction of runaway subsidies for the solar power industries which was brokered on Tuesday.

"I hope that all stakeholders can agree on a solution (tonight)," Altmaier told reporters after his conference speech.

Open questions about how to proceed on fledgling offshore wind industries could likely be clarified before the parliament breaks for summer, he added.

(Reporting by Vera Eckert; Editing by David Goodman and Mike Nesbit)