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Germany is losing its European allies in the transition to cleaner energy as the costs of the shift soar, Economy and Energy Minister Sigmar Gabriel said.

“If you talk with those who were on our side a few years ago, for instance southern European countries -- the eastern countries were always difficult -- you’ll find almost nobody who’s ready to follow us,” Gabriel, the vice chancellor and Social Democratic Party leader, told lawmakers in Berlin today. “We need to demonstrate that a successful industrial society and the switch to renewable energy are compatible.”

Gabriel’s comments reflect Germany’s dilemma as Chancellor Angela Merkel’s government seeks to retain subsidies to encourage clean-energy installations while taming electricity costs that have soared as a consequence. German electricity is the second most expensive in Europe after Denmark and about double the average power prices in the U.S.

Compulsory surcharges paid by German consumers and industry on their electricity bills may total about 24 billion euros ($32.6 billion) this year, the “limit” the economy can bear, Gabriel said.

With costs rising, Germany “has no time to lose” reforming the EEG clean-energy law regulating subsidies, Merkel told lawmakers yesterday in her first policy speech of 2014.

Gabriel will host French officials in Berlin on Feb. 3 to discuss ways of forging closer energy ties, French Environment Minister Philippe Martin said yesterday. President Francois Hollande called earlier this month for the creation of a Franco-German energy alliance.

To contact the reporters on this story: Brian Parkin in Berlin at bparkin@bloomberg.net; Rainer Buergin in Berlin at rbuergin1@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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