German Coalition Party Seeks End of Much-Copied Renewable System

German Chancellor Angela Merkel’s junior coalition partner plans to end a system of clean-energy subsidies that’s emulated around the world as costs rise.

The Free Democratic Party wants to replace feed-in tariffs, which secure above-market power rates for 20 years, with fixed levels of generation from renewables, said Patrick Doering, the party’s general-secretary. Such a regime would allow utilities to pick the most cost-efficient generation technology, he said.

The system, which the party seeks to introduce by 2020, is similar to ones in countries including the U.S., U.K. and Italy.

“We need to introduce more market forces into this system” as the subsidy consumers are paying for renewables may jump about 40 percent next year, Doering said today in Berlin.

Germany, planning to halt nuclear generation by 2022, is debating how to reform its EEG clean-energy law that has helped raise the share of renewable power it uses to a quarter of the total. While Economy Minister Philip Roesler, of the FDP, plans to reform EEG before next year’s federal elections, Environment Minister Peter Altmaier, responsible for the legislation, last month said the country must take time to discuss any changes.

The FDP’s plan is “inefficient and expensive,” Joachim Lohse, the environment minister for Bremen, told reporters in Berlin today. It’s “a myth” that expanding renewables weighs on power prices and threatens supply, said Franz Untersteller, the environment minister in the state of Baden-Wuerttemberg.

While EEG needs reforming, the country should cut benefits for large industrial users that are exempt from paying for the renewable expansion instead of trying to slow growth, they said.

The FDP is seeking short-term measures to counter rising costs next year, said Stefan Birkner, environment minister in the state of Lower Saxony. They include lowering taxes and allowing the grid regulator to shut large clean-energy producers if they threaten the stability of the regional power network.

The party is also proposing a cap on subsidies if technologies reach their targets before 2020.

To contact the reporter on this story: Stefan Nicola in Berlin at snicola2@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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