German Cabinet Approves Reformation of EEG

published: 2014-04-10 11:14 | editor: | category: News

German Cabinet has approved a controversial energy reforming policy of EEG (the Renewable Energy Act) regarding subsidies. This reformation will try to slow down the rise of power cost for industries and users, and it will also continue to help renewable resources development.

Germany's shift from nuclear/fuel power to green energy is one of Merkel's flagship policies. However, the original EEG has been posing strong stress on heavy industries and development of renewable resources includes wind and solar power. EEG imposes extra surcharge from bills of electricity to support renewable energy, but power-consumers, especially those who run factories that need more power, wish to be relieved from higher bill so that they could ensure their competitiveness.

Reuters reported that this blueprint is a victory for Economy and Energy Minister Sigmar Gabriel, the Social Democrat (SPD) leader. He has had to balance maintaining growth in renewables with the requirement to keep heavy industry happy with affordable power.

"Some 100 days after the start of the new government we have given the energy shift a new start," Gabriel told reporters at Reuters.

According to the draft, the government plans to increase the share of renewable sources to 40-45% by 2025 and to 55-60% by 2035 so it can eliminate nuclear power by 2022. Ordinary power users still have to pay the surcharge but some industrial sectors could be protected from it. This is to make sure that these sectors could keep their jobs through sufficient and affordable raw materials and energy.

Gabriel’s aim of reformation is to continue developing renewable resources as well as support renewable sectors to become more competitive so it can enter the industrial market step by step. Meanwhile, lower subsidies, which come from the surcharge of electricity bills, would also help slow down the rise of power cost.

However, not everyone supports this reformation. A senior manager at AS Solar said this reformation would cause German PV industry to “complete collapse.” This draft will be deliberate in August.

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