Germany's municipal utilities criticise high renewables subsidies - report

Sep 11, 2013 - Germany's municipal utilities expressed their discontent with the too high subsidies for renewables in the country at their annual convention in Dresden, Handelsblatt reported today, quoting an interview with Hans-Joachim Reck, head of utility association VKU.

According to Reck, the excessive growth in subsidies for renewable energy means that the market does not function any more. Currently, electricity prices are so low that many highly-efficient conventional plants, for example in Darmstadt or Hanover, cannot run at profit. At the same time, the government has urged the municipalities to invest in conventional plants in order to support the country's energy transition, he said. That means that large investments have been lost and the costs will be at the end borne by the municipalities.

Municipal utility companies have invested in renewables, and especially in offshore wind parks, but this is not enough to provide enough electricity for a business location such as Germany, Reck said. Therefore, the companies have also spent money on conventional highly-efficient power plants.

Reck said he expects not much to happen during the current election campaign but the pressure to act is enormous. The German power sector, he said, should return to market-oriented mechanism. A framework enabling investments in highly-efficient gas power plants should also be introduced, Reck added.

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