German Utilities Seek End of Unlimited Clean-Energy Aid

German Chancellor Angela Merkel’s new government must place a limit on aid to clean-energy developers and force them to sell power on the market to reduce costs, a utility lobby said.

Developers of new projects should sell electricity on the market and get a flexible “market premium” on top of that, the BDEW, representing utilities including EON SE and RWE AG (RWE), said today in an e-mailed statement. The amount of electricity that qualifies for the aid should be capped, the group said in a 22-page paper. Under the existing rules, there’s no limit for the next 20 years,

“Today we expect renewables to generate power ecologically,” Hildegard Mueller, head of the BDEW, said in the statement. “In the future they also have to do that reliably and at low cost.”

Merkel has vowed to change a 13-year-old subsidy system that was copied around the world and helped turn Germany into Europe’s biggest clean-energy market -- and also one of the costliest. Reworking the rules may benefit consumers and reduce incentives for wind and solar farms, cutting orders for manufacturers such as Vestas Wind Systems A/S (VWS) and Trina Solar Ltd. (TSL) It could either help or hurt utilities such as EON and RWE.

Renewable units should also be equipped with remote-control technology to protect the stability of the power grid, BDEW said. In a later step, the market premium should be determined in auctions to reduce costs, BDEW said.

Germans pay more for electricity than any other nation in the European Union except Cyprus and Denmark, EU data show.

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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