German utility lobby presents power reform plan to new government
London (Platts)--27Sep2013/1005 am EDT/1405 GMT
German utility lobby group BDEW presented Friday its plan for the reform of Germany's electricity sector to the new government, recommending an end to guaranteed feed-in-tariffs for new renewable installations and a decentralized capacity market for conventional power plants as its key pillars. According to a 22-page position paper, a fundamental reform of the renewable energy law (EEG) should force new renewable projects to sell their electricity on the market and get an additional flexible market premium on top of that.
Green power operators should also be forced to take responsibility for grid security and other technical aspects, while the amount of electricity that receives support should be limited overall.
"Today we expect renewables to simply generate power ecologically. In the future they also have to do that reliably and at low cost," BDEW chief Hildegard Mueller said in a statement.
"For a successful implementation of the 'energiewende' [transformation to a renewable future], we need to achieve a role reversal between renewable energy and conventional power plants," the BDEW chief said.
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"Subsidy recipients must turn into merchants," she added.
As a second pillar of the reforms, the BDEW recommends to change the market design for conventional power plants.
"We don't want to secure necessary power plant capacity through further subsidies, but through an unbureaucratic and decentralized market place," Mueller said.
On this market, conventional power plant capacity should be traded in form of 'guarantees of security of supply' [Versorgungssicherheitsnachweise], the BDEW said.
For a short-term transitional phase, the BDEW also renewed its call for a strategic power plant reserve.
Germany's new government, most likely led by Angela Merkel, will face old problems in its attempt to reform the renewable energy law (EEG), which turned Germany into the global leader in green energy but left households and many businesses with some of the highest power bills across Europe.
The Chancellor captured a landslide victory in elections last Sunday, but Merkel's bloc of CDU/CSU fell just a few seats short of an absolute majority and lost her current allies, the FDP, as well. Merkel therefore needs to find a new coalition partner from either the Social Democrats (SPD) or the Greens.
Merkel has said before the elections that the rapid expansion of green energy in Germany has created problems and that a reform of the renewables law will be a priority straight after the elections.
German electricity consumers may have to pay a third more for subsidies paid to renewable power producers in 2014, the head of the German energy agency Dena estimates.
According to the BDEW, the average household paid Eur287/MWh ($387/MWh) for electricity in 2013 with fees, taxes and other levies accounting for more than 50%.
The BDEW represents some 1,800 utilities, ranging from the country's biggest energy firms E.ON and RWE to small municipal utilities as well as renewable energy firms, overall accounting for a combined 90% of the power market.
According to the BDEW, all members contributed to the position paper, which was agreed upon by the board in a special session on September 18.
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--Edited by Maurice Geller, firstname.lastname@example.org