* Power price rise may hit consumer support for green energy
* IEA says investors must be given stable policy framework
* IEA criticises German go-it alone approach
By Vera Eckert
FRANKFURT, May 24 Germany must rein in runaway
retail prices for electricity or risk a consumer backlash that
could undermine support for a massive shift toward green energy,
the International Energy Agency (IEA) said on Friday.
The Western world's energy watchdog pointed to weaknesses in
Germany's effort to move away from nuclear and fossil-fuel
energy towards a low-carbon economy, a move that was accelerated
by Chancellor Angela Merkel's decision in 2011 to exit nuclear
"Household consumers carry a disproportionate share of the
burden," the IEA said in its country report on Germany.
"The fact that German electricity prices are among the
highest in Europe, despite relatively low wholesale prices, must
serve as a warning signal," IEA executive director Maria van der
The mass-circulation Bild newspaper decried a 12 percent
jump in household power prices earlier this year as renewable
energy tariffs kicked in, while many industries were exempted
from the cost.
The IEA said retail power must remain affordable to ensure
the public acceptance that a transition to a low-carbon economy
Europe's biggest economy gives huge subsidies to support the
government's plan to boost renewables to 35 percent of output by
2020 and to 50 percent by 2030, guaranteeing investors prices
above market levels for up to 20 years.
Critics say this causes costly and damaging distortions in
the power sector, where renewables grow alongside the rising
taxes and fees that support them.
This year's surge in power prices compares with a 60 percent
rise over the previous 10 years. The state's share of the retail
bill amounts to 50 percent, most of it going to renewable energy
The IEA also said Germany must manage its policy in a more
predictable way to secure the billions of euros needed to build
new transmission networks to bring green power from remote
locations to centres of consumption.
"Sudden changes can undermine investor confidence and will
drive up costs in the long term, because of increased risk
premiums," the report said.
The Paris-based IEA also pointed out that German policy
decisions inevitably affect its neighbours, and called for
"close consultation" with them.
Polish and Czech transmission firms have complained about
unmanageable flows of German green power into their systems at
times of weather-driven oversupply.
(Reporting by Vera Eckert; Editing by Kevin Liffey)