Germany is concerned that European Commission legislative plans will harm its system of subsidy policy for renewable electricity, resulting in a loss running to billions of euros.
German daily Financial Times Deutschland reports that Brussels is planning to create a trading system for green electricity based on a system of pre-set quotas for EU member states.
The plan is to be unveiled in December as part of a overall package laying out how member states will ensure that 20% of their energy comes from renewable sources, a goal the EU set itself earlier this year.
But Berlin fears the commission plan will undermine its current subsidy system whereby the building of wind, sun or other green installations are supported with fixed prices for how much they feed into the electricity net.
This support has led to a boom in the renewable energy sector.
Under Brussels’ plan, if a country does not fulfil its quotas – i.e. produce enough renewable energy – then they would buy it elsewhere. Berlin fears that this market situation this will lead to a rise in prices for bio-energy, above the current fixed price in Germany.
FT Deutschland notes that at a recent expert conference in Amsterdam, the German environment ministry said that the German subsidy system would be “destroyed” and could by 2020 cost the government an additional €4 billion a year.
The result would be a loss in “public acceptance” of the system.
Berlin’s alarm looks set to put it on confrontation course with the commission.
Already the two sides have been scuffling over other areas in the energy sector – such as Brussels’ push to liberalise the energy market.
In unusually sharp criticism, commission chief Jose Manuel Barroso recently said that Germany’s “plea to leave power where it can be exercised closest to the citizen … is really aimed against the European institutions.”
His comments referred to Germany’s reluctance to separate the production and distribution channels of big energy companies – a key plank of the liberalisation package.
By Honor Mahony
11 October 2007
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