Energy Commissioner Oettinger: Germany Risks Losing Competitiveness

In an interview with the newspaper Frankfurter Allgemeine Zeitung (FAZ), German EU Energy Commissionar, Günther Oettinger, a long-time critic of Germany’s high energy prices, has warned that Germany might lose its competitiveness given its hesitant stance towards energy issues such as fracking, geothermal energy and the CCS technology. He welcomed the recent debate about a limitation of the electricity prices.

There was a great deal of emotion involved in the debate in Germany about topics like fracking, geothermal energy and the CCS technology with negative effects on research in these areas, Mr Oettinger said. He advised not to prohibit fracking in general.

In February the Federal Environment Ministry (BMU) and the Federal Economics Ministry (BMWi) presented a joint proposal to amend the Federal Water Resources Act (WHG) and the Ordinance on Environmental Impact Assessments Concerning Mining Projects (UVP-V) in order to regulate the use of the controversial fracking method under restricted conditions so as to prevent damage to nature. The bill still has to be adopted by Parliament and the Federal Council. In first reactions, the opposition, which has a majority in the Federal Council, had critised the agreement between BMU and BMWi as still being too far-reaching.

After much political wrangling the Act on the Demonstration and Use of the Technology for the Capture, Transport and Permanent Storage of CO2 was published in the Federal Law Gazette on 23 August 2012 and entered into force the day thereafter, fulfilling Germany’s long overdue obligation to transpose Directive 2009/31/EC on the geological storage of carbon dioxide. The CCS Act also sets strict rules for the CCS tecchnology.

Regarding the high electricity prices in Germany, which have seen steadily increasing surcharges including the one for renewable energy (so-called EEG surcharge), Mr Oettinger said he was happy that Germany had recognised the critical level of the electricity prices, which had still been negated by many a year ago.  He spoke out against a limitation of the electricity prices as proposed in February by Federal Economics Minister Philipp Rösler and Environment Minister Peter Altmaier or cuts of the electricity tax as demanded by the opposition.

Instead he called for a general revision of the Renewable Energy Sources Act (EEG) that promotes renewable energy fed into the German grids by providing fixed feed-in tariffs, giving renewable energy priority in the grids. The enormous growth of photovoltaics had to be reined in and renewable growth as such limited until there was enough storage and grid capacity, he said, adding that neither the priority for renewable energy in the grids could continue forever nor payments of a remuneration regardless of whether the electricity was needed or not. He did, however, reject a quota model that requires utilities to buy a certain amount of green electricity. This would lead to yet more wind turbines in Germany, as onshore wind power was the cheapest renewable energy form, he remarked, saying in the long-run it was advisable to build offshore wind farms, which yielded more energy.

With respect to back-up capacity for the fluctuating renewable energy he said a European framework was preferable over individual state legislation, announcing an EU proposal for the summer. The more the European electricity grids were linked allowing for imports and exports, the less back-up capacity was needed anyway, he pointed out.

In the discussion about climate protection targets for 2030 (for information on the green paper, which the EU Commission recently published, please click here) one had to be pragmatic, giving for instance also large energy-consumers the possibility to operate in the EU, Mr Oettinger demanded.

Source: Frankfurter Allgemeine Zeitung

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