German Environment Minister Peter Altmaier, a close ally of Chancellor Angela Merkel, has landed a coup that could score points for the conservatives in the September general election — at the cost of slowing down the country’s switch to renewable energy.
In a surprise announcement on Monday, he said he would draft legislation to cap subsidies to renewable energy producers in order to stop the recent sharp increase in electricity bills caused by those subsidies — a potentially popular move in an election year.
“It is not acceptable that electricity consumers should keep bearing all the risk of the future costs on their own,” Altmaier told a news conference.
The current system works like this: Germany wants to boost its power generation from wind, solar and biogas plants, but the electricity they produce remains more expensive than coal and nuclear power. To encourage investment in renewables, the government allows operators of such plants to sell their electricity at a guaranteed fixed price or feed-in tariff that is above the market price. Energy consumers pay the difference via a renewable power surcharge on their electricity bills. To date, there has been no upper limit on Germany’s subsidies for renewables, which means that the more solar panels and wind turbines go into operation, the higher the surcharge that consumers have to pay.