Germany Must Revise Renewables Law to Curb Price Jumps, RWE Says

Germany must change its renewable- energy legislation to curb power-price gains and guarantee security of supply, according to utility RWE AG (RWE) and European Union Energy Commissioner Guenther Oettinger.

Consumers can’t withstand more increases in electricity costs caused by the so-called EEG subsidy system, RWE Chief Executive Officer Peter Terium said today at a conference in Cologne. The system will also be unable to ensure supply security in the long term, he said.

The EEG program, which determines support given to wind and solar-power producers and gives them priority access to the grid, has helped expand renewable-energy output since Chancellor Angela Merkel’s government announced the gradual phaseout of nuclear generation last year. German consumers help pay for the subsidies through a surcharge on their electricity bills.

Consumers may see that charge rise as high as 5.4 euro cents a kilowatt-hour next year from 3.6 cents, Terium said. In coming years it will increase by 1 cent a year on average, the EU’s Oettinger said at the same conference.

EU nations need to coordinate the expansion of renewable- energy generation and keep the pace of growth in check, Oettinger said. The focus must be on the most efficient renewable energies in the most appropriate regions, he said.

“We have to think market-based, European and systemic,” Terium said.

EEG, or Erneuerbare-Energien-Gesetz, is the Renewable Energy Sources Act.

To contact the reporter on this story: Tino Andresen in Dusseldorf at tandresen1@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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