Siemens, SAP Home States Urge Merkel to Ensure Stable Power

Bavaria and Baden-Wuerttemberg, the home states of Siemens AG and SAP AG, urged German Chancellor Angela Merkel to ensure power supply is stable under her policy of closing nuclear reactors and expanding renewable energy.

The country should by summer 2015 start a capacity market, paying utilities to provide back-up power generation, to secure supplies as 7 gigawatts may close in both states by 2020, they said today. Energy-price increases should be curbed, they said.

“The energy switch poses enormous challenges for states like us that have a high share of nuclear-power generation and a strong industry that’s facing international competition,” Bavarian Premier Horst Seehofer and Baden-Wuerttemberg’s Winfried Kretschmann said in a joint e-mailed statement.

Merkel vowed to change green subsidies in her current term after spending on wind and solar power drove up bills. Germans pay more than any other European Union nation except Denmark.

While both states back cuts in “excessive” aid for wind onshore, support should be kept at a level that allows for more installations in southern Germany, Kretschmann said. Biomass energy should be used to stabilize power grids, Seehofer said.

Germany’s northern states also voiced concerns over the planned subsidy changes. Support for offshore wind should be protected rather than cut, Lower Saxony Premier Stephan Weil said today after meeting the heads of government of Schleswig-Holstein, Hamburg, Bremen and Mecklenburg Western-Pomerania.

The five states will “jointly represent our interests” in talks with Economy and Energy Minister Sigmar Gabriel, Weil told reporters. Gabriel last month assumed control of the biggest energy overhaul of any developed country. He’s overseeing the shutdown of Germany’s atomic fleet by 2022, ordered by Merkel after the Fukushima nuclear disaster in Japan.

Weil said he’s confident the states will succeed in persuading Gabriel to revise planned subsidy cuts in offshore wind to avoid job losses and retain support for an energy source that’s “particularly efficient and economic.”

Before it's here, it's on the Bloomberg Terminal.