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German Energy Concerns Prevail as Merkel Maps Out Vote Themes

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June 4 (Bloomberg) -- A majority of German companies said they’re concerned they’ll lose their competitive edge because of higher electricity costs linked to government plans to exit nuclear energy and power Europe’s biggest economy on renewables.

The results of the study commissioned by German state-owned energy researcher Dena, released in Berlin today, underscore the challenges Chancellor Angela Merkel’s government faces 15 months before national elections.

Struggling with sinking popularity and public unwillingness to shoulder more costs to resolve the euro-area crisis, Merkel hosted talks with her coalition leaders in the Chancellery today to map a course for the rest of the legislative term. Highway tolls, child-care subsidies, minimum wages and computer data storage join the energy overhaul as the main areas of dispute that need to be resolved before elections due in September 2013.

“The aim must be to lay down the guidelines until the next federal election,” Transport Minister Peter Ramsauer, a member of the CSU Bavarian sister party to Merkel’s Christian Democrats, was cited as saying in today’s edition of Bild newspaper.

Merkel hosted the coalition negotiations with CSU chief Horst Seehofer and Philipp Roesler, who heads her Free Democratic coalition partner, after Dena said that 60 percent of the companies polled said they expected higher production costs due to rising power prices. More than 40 percent said supply security would deteriorate “significantly.”

“We’re very concerned at how companies see the next 12 months of the energy overhaul,” Stephan Kohler, the head of Dena, said in Berlin as he unveiled the study conducted by Ernst & Young GmbH. “While the current mood is neutral, the future trend is clearly developing negatively.”

The German government must improve investment conditions for new coal- and gas-fired power plants, overhaul the country’s renewable energy subsidy system and better coordinate expanding wind turbines and solar panels with the need for energy storage facilities and new power lines, Kohler said. Ernst & Young polled 235 companies, municipalities and industry associations, it said.

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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