Time to renew

8 April 2014 By Olaf Storbeck

Coal and gas power generators might hope to profit from a reform of costly subsidies for solar and wind power. But while the government is trying to cut costs, the target – almost doubling the share of renewables by 2025 – hasn’t changed. RWE and E.ON will continue to suffer.

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The German cabinet approved an overhaul of the subsidies for renewable power on April 8. The plans aim to stabilise the costs for building wind turbines and solar parks, which add up to 24 billion euros a year to consumers’ electricity bills. The government also aims to preserve most of the discounts for energy-intensive manufacturers.

The reform confirms the political objective of generating 40 to 45 percent of all electricity from renewable sources by 2025, and 55 to 60 percent by 2035. Currently, the share stands at 25 percent, up from 6 percent at the turn of the century.

The blueprint has been devised under the auspices of Economic Minister Sigmar Gabriel, the party leader of Merkel’s centre-left coalition partner SPD. It has already received the informal approval of Germany’s regional states, the Bundeslaender.

The new law is scheduled to be in force by August 2014.

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