November 14, 2005

German wind lobby hails policy, utilities uneasy

By Vera Eckert

FRANKFURT, Nov 14 (Reuters ) - German wind power lobby BWE
said on Monday support for renewable energy in the new
coalition deal would unleash huge investments but conventional
producers said they were disappointed the status quo was left

BWE said that the unhindered expansion of wind power which
accounts for the bulk of alternative energy also derived from
solar, biomass, hydro and geothermical sources may attract
investments of 110 billion euros by 2020-2030.

"The ongoing expansion of renewable energy has been
secured," a spokesman for the Berlin-based group told Reuters.

"The big energy utilities' hopes of a return to a
conservative policy have been shattered.

"Now they have to adjust and start investing more into
modern, decentralized energy sources."

The coalition agreement unveiled on Saturday reaffirmed
earlier statements that existing renewable legislation will be
left unchanged up until a mandatory review in 2008.

The huge overall package paves the way for a grand
coalition of Christian (CDU) and Social Democrats (SPD).

The SPD enforced pledges to expand renewables to a share of
at least 20 percent of the overall energy requirement by 2020
although the CDU had only wanted to commit itself to an already
realistic rate of 12.5 percent by 2010.

The SPD also secured control of the environment ministry
which will be headed by Sigmar Gabriel, former premier of Lower
Saxony state, a leading wind power producer.

A spokeswoman for the VDEW power industry association whose
members predominantly represent conventional thermal power
stations said: "Unfortunately, there has not been a change to
the present (SPD/Green Party-led) policy. We'll see if the
coalition has the power to implement changes later on."

VDEW had lobbied strongly to change the renewable energy
funding law (EEG) in favor of an efficiency-based quota system.

But the coalition deal means blanket support for the new
techologies will continue to be borne by consumers who pay
three times the market price of thermal power for green energy.

Thanks to the push, wind power capacity has grown to 17,000
megawatt onshore (MW), making Germany the world leader.

BWE said the 110 billion euros envisaged investments in new
and old onshore turbines of 60,000 MW and 25,000 MW of offshore
capacity in the North and Baltic Seas, which prior to the deal
had been less likely to be made.