Merkel Pulls Back on Wind Power Cuts

In an effort to gain political support for her energy policies, German Chancellor Angela Merkel has agreed to make smaller cuts to wind power assistance than she previously wanted. She agreed to exempt projects that replace old wind turbines from the annual capacity limits of 2.5 gigawatts, a change demanded by the regional governments of Schleswig-Holstein, Bremen, Hamburg, and Lower Saxony. She also agreed to give more permits to offshore wind projects, and slow down the phase down of subsidies for such projects.

Merkel’s move was seen as a way to maintain support from these regional governments for her energy reform legislation. She is seeking to get enough support for her legislation by April 8, a package that will set capacity limits and subsidy levels for wind power moving forward. She appeared with the Prime Minister of Schleswig-Holstein at a news conference to announce the move. “Today is a good day for wind energy,” Torsten Albig, Schleswig-Holstein’s top politician said on April 1.

Nordex SE, a huge Germany wind turbine manufacturer, saw its shares rise to their highest levels in five months on the news.

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Not everyone was happy. Despite the concessions to the wind industry, a major wind trade association criticized the legislation. "Despite some corrections, the (plans) are painful ... The shift to renewable energy will lose momentum significantly as a result of this law," said Sylvia Pilarsky-Grosch, head of the BWE wind energy association, according to Reuters.

Angela Merkel has made the Energiewende a key part of her platform as the country transitions away from nuclear power, but, owing to the rapid success in rolling out renewable energy, the costs have climbed. She still maintains that Germany is committed to moving towards clean energy economy, but will do so with less public assistance.

By Charles Kennedy of Oilprice.com