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Merkel’s Failure to Agree on Energy Hurts Investors, BDEW Says

The failure of German Chancellor Angela Merkel and state leaders to agree on how to contain rising power prices prolongs a period of insecurity for investors, the country’s BDEW utility lobby said.

Six months before federal elections, Merkel and state leaders failed to agree on an overhaul of the country’s EEG clean-energy subsidy law and stop electricity prices from rising at talks in Berlin yesterday.

“Adjourning the discussions into the next months instead of making concrete decisions is not acceptable for the energy industry,” Hildegard Mueller, head of the BDEW that represents utilities including EON SE and RWE AG, said in an e-mailed statement. “The phase of insecurity for investors, consumers and the energy industry is being prolonged.”

Merkel is working to prevent a voter backlash after costs for Germany’s clean-energy expansion spiraled as the government strives to more than triple the share of renewables in the power mix by 2050 while phasing out nuclear generation. Consumers in Europe’s biggest economy have seen power bills climb after a fee they pay for renewables jumped 47 percent to a record 5.28 euro cents a kilowatt-hour on Jan. 1.

The government and state leaders agreed to transfer to federal authorities planning rights for power grids to speed up projects. In a boon to clean-energy investors, Merkel, after pressure from the opposition, vowed not to make retroactive cuts to renewable subsidies. The chancellor said she was “skeptical” regarding an opposition proposal to reduce power taxes by 25 percent to save consumers 1.6 billion euros ($2.1 billion).

The government and state leaders will continue talks on how to stop power prices from rising in a bid to find an agreement before the summer recess, they said. They probably won’t tackle a comprehensive reform of the EEG clean-energy until after the Sept. 22 elections, Merkel said.

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