June 10, 2013 / 12:14 PM / 5 years ago

German drive to green power too costly for consumers-utilities

FRANKFURT (Reuters) - Germany’s government must curb the costs of its unhindered expansion of subsidised renewable energy, utility industry group BDEW said on Monday, fearing electricity prices risk becoming too burdensome for consumers.

German household power is among the most expensive in Europe, due to fees passed on to enable payments of above-market prices to producers of green power. This is done via feed-in tariffs, the core element of the subsidising law, called EEG.

“We have to find a way with all participants to dampen the overall cost,” said BDEW’s managing director Hildegard Mueller.

“Germany as an industrial nation must be economically efficient to reach its ecological targets,” she told reporters in Berlin.

BDEW figures showed state-related taxes and fees on German power prices this year will total 31.6 billion euros ($41.8 billion), one third more than in 2012 and nearly treble the sum seen 10 years ago.

EEG payments alone will amount to 20.4 billion euros, of which households will have to stump up 35 percent, according to the group’s data.

BDEW represents 1,800 companies in power, gas, water and heat production and distribution. It issued the figures ahead of its annual meeting on June 12 and 13, which will be attended by Chancellor Angela Merkel.

In September Merkel will contest her first general election since her 2011 energy policy change, when she decided to phase out the nuclear fleet faster than intended and promote higher power production from renewables.

Households are especially angered by a raft of exemptions and waivers for green power and network charges granted to Germany’s industry, meaning they pay the bulk of the costs.

Big industrial players paid only a quarter of the EEG costs, helped by exemptions put in place to protect their international competitiveness, BDEW data showed.

Households face another increase in their power bills for 2014, because the government has postponed the decision to rein in EEG costs until after the election.

This comes despite falling revenues in the wholesale power market, where conventional power is increasingly replaced by intermittent renewable power, eroding utility profit margins.

“We expect answers and decisions for a sustainable energy market from the government after the election, regardless of who’s in it,” said Mueller, demanding a new system design.

Reporting by Vera Eckert, editing by Jeff Coelho

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