EU plans probe on German renewable energy law - Spiegel

BERLIN | Sun Jul 14, 2013 5:59pm BST

BERLIN (Reuters) - The European Union plans an investigation into Germany's renewable energy law due to concerns that exemptions for some firms from charges levied on power users breaches competition rules, a German magazine reported on Sunday.

Without citing sources, Der Spiegel weekly said lawyers in Brussels had looked at the law which provides a framework for Germany's push to renewable energy, and that Commissioner Joaquin Almunia had concluded it may breach EU rules.

The Commission would open proceedings on Wednesday, it said.

The officials criticised exemptions made for energy intensive companies in Germany, reported the magazine, adding this may lead to companies having to pay millions of euros in back payments.

A spokesman for the Commission declined to comment on the report.

Chancellor Angela Merkel said in a television interview Brussels had raised questions about Germany's renewable energy law and she reiterated her intention to make changes to it if she is re-elected in a September election.

The law was originally drawn up more than a decade ago, before Merkel took office.

The generous incentives offered to renewable producers have resulted in a boom in the sector, especially photovoltaics, and while Merkel has tweaked some of the subsidies, resistance from Germany's federal states has prevented any wholesale change.

"We urgently need an amendment to the renewable energy law," Merkel told ARD television.

"There are even critical questions coming from Brussels," she said, adding rising energy costs were a problem. She urged Germany's federal states to cooperate on the changes which she has previously said will include reining in renwables subsidies.

The debate about the cost of the energy transition and energy prices could become an issue in the election.

Merkel has set out ambitious goals for Germany to wean itself off fossil fuels, phase out nuclear power and switch to renewable energy sources but it is costly.

Households are paying for subsidies to renewable energy producers and have been hit by sharp increases in the last few years. Yet fears that German industry will become uncompetitive if it has to pay too much for energy has led to exemptions from these charges for many firms.

The EU said in March it would investigate power grid charge exemptions which have been granted to big steel, chemicals, glass, cement and building materials companies.

(Additional reporting by Ethan Bilby in Brussels; Reporting by Madeline Chambers, editing by William Hardy)

Source: http://uk.reuters.com/article/2013/07/14/uk-germany-eu-energy-idUKBRE96D04S20130714?feedType=RSS&feedName=businessNews

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