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Merkel May Create Energy Ministry as Switch Becomes Vital

March 13 (Bloomberg) -- Chancellor Angela Merkel may set up a national energy ministry as Germany’s shift from nuclear power to renewables becomes the crucial task if she’s elected for a third term in September, a key party ally said.

There will “surely be” an energy ministry or a special office in the chancellery for energy, as there was for German reunification after the fall of the Berlin Wall in 1989, Reiner Haseloff, state premier of Saxony-Anhalt, said in an interview.

Merkel seeks to more than triple the share of renewables to 80 percent of Germany’s power mix by 2050, with Europe’s biggest economy set to shutter its nuclear reactors by 2022. The cost and scope of the 550 billion-euro ($718 billion) project have moved energy to the center of the political agenda as Merkel runs for re-election on Sept. 22.

The German energy switch is “a strategic task and indeed the most strategic task since German reunification in connection with the economy,” Haseloff, who was his state’s economy minister from 2006 to 2011, when he became premier, said in the March 6 interview in Magdeburg. “I was energy and economy minister for a long time, and on energy and economy themes she listens especially closely because she knows that I have specialized knowledge other than, say, a lawyer.”

Both he and Merkel gained doctorates in physics after growing up in communist East Germany. Merkel leads Germany’s ruling Christian Democratic Union and Haseloff serves on its executive committee.

The opposition Social Democratic Party has accused Merkel of mismanaging the energy switch. Peer Steinbrueck, the party’s chancellor candidate, said in December that voters live in fear of power outages and price increases because of government missteps. Germany had the third-most expensive household electricity in the 27-nation European Union in 2012 after Denmark and Cyprus, according to EU data.

No Fracking

Haseloff said that while he’s concerned about energy prices, Germany won’t embrace fracking for natural gas because of environmental concerns.

“I’ve seen it” in the U.S., he said. “Such a thing would be unthinkable in Europe and Saxony-Anhalt,” Haseloff said, adding that he expects U.S. voters to rebel against a massive spread of fracking and that this will cause American gas and energy prices to rise in the medium term.

Yet he acknowledged that current low energy costs in the U.S. are a good way to push forward an industrial revival and that high power prices in Germany are a concern.

“I just spoke with people from Dow, who have a facility in Saxony-Anhalt and are facing a decision in their headquarters on ‘where do we go? Do we expand our plant in Schkopau or go to an Arab country or do we go to the U.S., given the gas prices?’” he said.

The Dow Chemical Co., which has 5,400 workers at its plants in Saxony-Anhalt, is the state’s second-biggest employer, according to data from the premier’s office

“It’s an existential question,” Haseloff said.

To contact the reporters on this story: Leon Mangasarian in Berlin at lmangasarian@bloomberg.net; Stefan Nicola in Berlin at snicola2@bloomberg.net

To contact the editors responsible for this story: James Hertling at jhertling@bloomberg.net; Reed Landberg at landberg@bloomberg.net

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