Positive Environment News

Merkel Seeks More From Utilities For Renewables

Date: 27-Aug-10
Country: GERMANY
Author: Andreas Rinke

Merkel Seeks More From Utilities For RenewablesPhoto: Reuters/Ina Fassbender

German Chancellor Angela Merkel and Minister of Environment Norbert Roettgen (L) listen during their visit to a construction site of a coal-fired power plant in the western city of Luenen, August 26, 2010.
Photo: Reuters/Ina Fassbender

German utilities should make more of a contribution toward encouraging the development of renewable energy in addition to paying a planned nuclear fuel tax, Chancellor Angela Merkel said on Thursday.

On a visit to the Emsland power station in the western town of Lingen, Merkel said such a contribution was needed in the context of extending the lifespan of nuclear power plants, but offered no details over what form it should take.

"I am explicitly not using the word 'levy', Merkel said. "This is all bedded into an extension of the lifespans of the nuclear power plants, which I personally see as necessary and also as foreseeable."

Under terms agreed by the center-left administration of ex-chancellor Gerhard Schroeder, all German nuclear plants are due to shut down by 2021. Merkel wants to extend their lifespans while forcing utilities to hand over more of their profits.

Merkel's center-right ruling coalition, whose ratings have been plummeting, has been at loggerheads with utilities over her plans for a tax on nuclear fuel rods, with which her government aims to raise 2.3 billion euros ($2.9 billion) a year.

The biggest utilities, E.ON, RWE, Energie Baden-Wuerttemberg and Vattenfall have campaigned against the tax and pushed for a contract to pay a tax-deductible fixed charge instead.

However, there were signs on Thursday from utilities that their resistance to a tax may be weakening.

"A tax can also be something you can depend on," said RWE Chief Executive Officer Juergen Grossmann, but he restated his preference for the solution sought by utilities.

Grossmann and his opposite number at E.ON held talks on Thursday with the chancellor, who is under pressure to reach an agreement on Germany's future nuclear power strategy.

The tax is part of an energy plan for coming decades, due to be presented by the end of September, which includes extending the lifespans of the country's 17 nuclear plants.

The tax also forms part of a bid to consolidate the federal budget by 80 billion euros over the next four years.

Last week, dozens of German industry bosses criticized Merkel in an open letter against the nuclear tax, accusing her of putting the country's future energy supply at risk.

Nuclear power providers had threatened to cut investments and possibly even shut down plants if the tax were implemented.

Merkel has stood firm against such pressure and had already said more funds could be needed for renewable energy projects.

E.ON Chief Executive Johannes Teyssen tried to smooth the waters on Thursday, saying the government had the last word.

"The government's energy policy is being decided by the government," he said.

(Editing by Jane Baird)

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