Germany is facing legal action by the European Commission for discriminating in favour of its own energy companies in breach of competition law.
The European Union’s energy tsar, Günther Oettinger, said it is unacceptable that German wind-power companies draw on state subsidies for renewable energy, while rival companies from Denmark and other European countries are shut out.
German news weekly Der Spiegel said Brussels is expected to launch a formal infringement case on Wednesday, and will probably demand that beneficiaries of illegal aid pay back sums already received.
Part of the complaint involves the way Germany is sharing out the costs of its Energiewende, its push to boost the share of electricity generated from wind, solar and other renewables to 50pc by 2030, and 80pc by the middle of the century.
The government shut down eight nuclear reactors after the Fukushima disaster in Japan and is phasing out the country’s whole nuclear industry by 2022.
Switching to renewables, including plans for 60,000 wind turbines, some in environmentally sensitive areas, may cost €1 trillion over the next 30 years, and has set off a political storm in Germany.
Much of the burden is falling on German households, while some 4,500 German businesses are able to claim exemptions to help to preserve their global competitiveness.
The International Energy Agency warns that this policy is pushing household electricity costs to such high levels that it risks undermining the popular support for Germany’s green energy drive.
The macro-economic effect of this distorted tax regime has been to compress household consumption while supporting companies, a mix that curbs imports and acts as a disguised form of protectionism. It is one of the many features of the German system that has led to accusations of mercantilism by other EMU states.
The clash between Berlin and Brussels follows a tetchy dispute last week after the Commission pushed for direct powers to carry out EMU-wide bank rescues and shut down insolvent lenders.
German finance minister Wolfgang Schäuble said that the plan was “built on sand”, insisting that the decisions to close banks put huge sums at risk and must remain the preserve of national regulators, at least until there is profound change in the EU’s constitutional structure.
The Commission has also clashed with Germany over its plans to impose subsidies on Chinese solar companies, a move that threatens to damage Germany’s burgeoning interests in China. More than 46pc of all the eurozone exports to China come from Germany, compared to 10pc from France, 8pc from Britain, and 6pc from Italy.
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