EU's Oettinger says German power needs price cap

FRANKFURT Tue Aug 14, 2012 8:15am BST

FRANKFURT Aug 14 (Reuters) - Germany's electricity prices risk becoming a burden for consumers as overly generous renewable power subsidies are passed on, European Energy Commissioner Guenther Oettinger said in a German newspaper on Tuesday, demanding a price cap.

"When the new price for renewable subsidies (for 2013) becomes known in the autumn, we will have to talk about a limit," Oettinger told mass circulation Bild in an interview.

"Otherwise, the costs for (retail) customers and industry will run out of control," he said. "The expansion of solar and wind power must be linked to the corresponding expansion of transmission networks and storage plants."

Germany has the second highest power prices in Europe, mainly due to its high taxes and fees which include paying above-market rates for green power via so-called feed-in tariffs.

Transmission firms are due in October to present estimates for the 2013 surcharge to be added on for the funding of renewables.

Given record new solar power installations this year, they are likely to rise sharply when the new units start collecting their revenues.

An increase for the likely green power element next year is expected to rise to over 5 cents per kilowatt hour from 3.6 cents applied in 2012, which will put the government under pressure to find ways to mitigate the burden for users.

This is notwithstanding falling prices in the power wholesale market, where levels are down 8 percent from 2012 peaks in February due to weak demand in the euro zone. (Reporting by Vera Eckert; Editing by Jason Neely)

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