EU's Oettinger warns against Germany cutting renewable subsidies

Reuters News
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Posted: Aug 26, 2013 12:02 PM
EU's Oettinger warns against Germany cutting renewable subsidies

BERLIN (Reuters) - Germany should not introduce cuts to already guaranteed renewable subsidies, European Energy Commissioner Guenther Oettinger said, adding such a move would seriously hurt investor confidence.

Political parties and energy groups are all in favor of reforming Germany's renewables law, a step likely to be taken after next month's general elections, but concrete proposals have been scarce.

Investors have repeatedly warned that cuts in already agreed renewable subsidies, which are guaranteed over roughly 20 years, could damage investors' willingness to spend badly needed cash on Germany's energy shift towards alternative power sources, estimated to cost about 550 billion euros ($737 billion).

"We strongly advise against retroactive measures," Oettinger said during the annual Handelsblatt Renewable Energy conference on Monday.

"That means all those that have installed solar panels, biogas plants or wind parks should receive the level of support that was guaranteed at the time of installation."

European countries including Spain, the Czech Republic and Bulgaria have all implemented retroactive taxes on existing operators of renewable energy installations, leading investors to harshly criticize such moves.

Oettinger also said that he expected the European Council to reach a decision in October or November on a proposal to temporarily withdraw permits from the bloc's Emissions Trading System (ETS), a process known as backloading. The European Parliament backed the plan in July.

It still needs the support of a majority of EU member states to become law.

"We will now likely realize backloading," Oettinger said, but cautioned it would not significantly raise carbon prices, pointing out that investors would be aware that the permits would be re-introduced later.

(Reporting by Christoph Steitz; editing by Jason Neely)