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German ‘land of industry’ jeopardized by green push, lobby says

Germany will threaten jobs and hamper growth if it persists with expanding renewable energy at the current pace, a chemical lobby said.

Continuing with uncapped subsidies to renewable developers and removing aid for companies that use a lot of energy risks 211 billion euros ($285 billion) in gross domestic product and 1.3 million jobs by 2030 compared with a slower renewable expansion and greater use of natural gas, the VCI lobby said, citing a new IHS Inc. (IHS) study it commissioned.

“The current course of the energy switch is extremely dangerous for Germany, the land of industry,” Karl-Ludwig Kley, president of the VCI, told reporters today in Berlin. “The charges of the energy switch can decide over profit or loss, growth or decline, survival or collapse.”

Chancellor Angela Merkel needs to keep a lid on soaring energy bills that have provoked consumer and industry anger as her government phases out nuclear reactors, a 550 billion-euro plan that has helped saddle Germans with the third-highest electricity prices in the European Union. Merkel has vowed to change the EEG clean-energy subsidy law aimed at increasing the share of renewables to 80 percent of the power mix by 2050 from about 23 percent now, to reduce the plan’s costs.

Germany can remain competitive if it continues to shield large energy consumers from the EEG’s costs, expands the use of gas and slows the pace of the renewable expansion by adding fewer offshore wind farms, IHS said in the study.

“Rising electricity costs present a challenge similar to one Germany faced a decade ago from a rigid labor market,” Ralf Wiegert, director of IHS Economics, said in a statement handed out at the event.