Key German lawmaker: End renewable energy subsidies by 2020

BERLIN, Oct. 16 (UPI) -- A key German lawmaker said this week the business wing of Chancellor Angela Merkel's Christian Democratic Union wants to end green energy surcharges by 2020.

Michael Fuchs, deputy leader of the CDU faction in the German Bundestag and party economic affairs spokesman, told the daily Frankfurter Allgemeine Zeitung Monday he wants to see the controversial surcharges on consumer energy bills phased out as soon as Germany attains 35 percent of its energy mix from renewable sources.

For new wind and solar power projects after 2020, delivery of the subsidies would end, he said, adding that after the 35-percent level is reached, "what further expansion there is must come without subsidies and under market conditions."

Fuchs' comments came as German consumers were bracing this week for what was expected to be an increase in the 2014 "eco-levy" under the German Renewable Energy Act from 7.089 to 8.463 U.S. cents per kilowatt-hour. An average household consuming 3,500 kilowatt-hours would face an additional cost of more than $80 per year including value added tax, the newspaper said.

Fuchs said the CDU's economic affairs leaders believe the fees levied under the renewables law, EEG, could be better spent by consumers elsewhere to stimulate the economy.

"The promotion of green electricity costs will cost our citizens ($32.5 billion) next year, which is a lot of money that could otherwise be spent on buying new cars, furniture or on restaurant visits," he said, predicting the EEG surcharge would rise again in 2015.

German currently derives 25 percent of its energy from renewable sources, so the 35-percent level could be reached before 2020 -- in which case, the subsidies would be capped then under the proposal.

Fuchs suggested the establishment of expansion plan to broken down into equal annual installments until the 35-percent mark was achieved, FMZ reported.

Seeking to reign in a pattern of piecemeal wind and solar production that has resulted in high costs, Fuchs also demanded that new plants be built specifically where it is economical to do so.

Further, he said they should not automatically be preferred for feeding into the grid. Instead, new green electricity sources should be based purely on demand and the business risks, suggesting that each operator must sell a portion of the electricity directly onto the open market.

The call from CDU conservatives to abolish EEG surcharges within seven years came as it seeks a coalition partner to form a new government, with most analysts predicting a "grand coalition" with the left-leaning Social Democratic Party.

SDP environmental policy spokesman Ulrich Kelber, however, said the rise in the green surcharge isn't due to the expansion of renewable energy, but by a 2010 amendment to the EEG authored the former CDU-Free Democratic Union government exempting Germany's biggest power companies from obligations to purchase renewable electricity.

This means the green power they would consume is instead sold on the open market where it must compete with cheaper coal-produced prices.

"Only 0.15 cents of the increase going to the mere extension of the EEG -- the real energy revolution hardly therefore costs any extra money," Kelber told Berliner Zeitung. "The rest of the increase is due to the failed policies of (the former government), through which ... there are too many exceptions to the EEG surcharge for the industry."