EU's Oettinger warns against Germany cutting renewable subsidies

BERLIN Mon Aug 26, 2013 1:36pm BST

German EU Commissioner Guenther Oettinger enters a plenary session of the EU in Copenhagen, January 11, 2012. Denmark will take over the Presidency of the Council of the European Union in the first half of 2012. REUTERS/Fabian Bimmer

German EU Commissioner Guenther Oettinger enters a plenary session of the EU in Copenhagen, January 11, 2012. Denmark will take over the Presidency of the Council of the European Union in the first half of 2012.

Credit: Reuters/Fabian Bimmer

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BERLIN (Reuters) - Germany should not introduce cuts to already guaranteed renewable subsidies, European Energy Commissioner Guenther Oettinger said, adding such a move would seriously hurt investor confidence.

Political parties and energy groups are all in favour of reforming Germany's renewables law, a step likely to be taken after next month's general elections, but concrete proposals have been scarce.

Investors have repeatedly warned that cuts in already agreed renewable subsidies, which are guaranteed over roughly 20 years, could damage investors' willingness to spend badly needed cash on Germany's energy shift towards alternative power sources, estimated to cost about 550 billion euros (472 billion pounds).

"We strongly advise against retroactive measures," Oettinger said during the annual Handelsblatt Renewable Energy conference on Monday.

"That means all those that have installed solar panels, biogas plants or wind parks should receive the level of support that was guaranteed at the time of installation."

European countries including Spain, the Czech Republic and Bulgaria have all implemented retroactive taxes on existing operators of renewable energy installations, leading investors to harshly criticise such moves.

Oettinger also said that he expected the European Council to reach a decision in October or November on a proposal to temporarily withdraw permits from the bloc's Emissions Trading System (ETS), a process known as backloading. The European Parliament backed the plan in July.

It still needs the support of a majority of EU member states to become law.

"We will now likely realise backloading," Oettinger said, but cautioned it would not significantly raise carbon prices, pointing out that investors would be aware that the permits would be re-introduced later.

(Reporting by Christoph Steitz; editing by Jason Neely)

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Comments (2)
PWW25 wrote:
Indeed, what the German clean energy producers fear is what is already happening in Spain.

Spanish authorities have cut 4 times in retrospect the promised subsides, with absolute disregard for the rule of law. Now they are preparing the 5th cut that will be heavily retroactive, the last nail in the coffin for PV energy producers.

To me, it is impossible to understand why the European Commission is condoning such behavior, will other UE countries come next after Spain?. How long will it take for European authorities to act? to strongly advice about something is not the same as to take action against such thing.

PV energy producers all over Europe trusted an European Directive and leveraged to do these installations as the premium tariff was guaranteed by law in all member-states. Next step is for these people to go burst causing yet another big financial disruption.

Aug 26, 2013 6:19pm BST  --  Report as abuse
GraceAdams wrote:
I agree, ex post facto laws are generally a bad idea.

Aug 28, 2013 7:47pm BST  --  Report as abuse
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