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Germany

Germany

Green tax suspense

Germany's new government continues to keep the renewables business in worried suspense over its plans for a support program to compensate clean generation for the across-the-board electricity tax coming in April. Despite pledging its support to renewables, the Social Democratic and Green Partly coalition has blown hot and cold in equal amounts since coming to power in September. Renewables were first shocked to find that green power was to be subject to the new tax, just like fossil fuel and nuclear. The government's "coalition statement" had expressly excluded renewables from the proposed tax. Then came the news of a renewables support program worth DEM 300 million a year to compensate for the tax. But early last month renewables were affronted once more when the proposed program budget was slashed to just DEM 20 million by finance minister Oskar Lafontaine. Meantime, the support program is back on the negotiating table together with the 1999 federal budget -- and the economic affairs ministry promises the amount will be more than DEM 20 million. The stop-go progress reflects the ebb and flow of relations between the leading lights of the new government. From time to time, the Social Democrats seem to have felt the need to flex their muscles against the junior coalition partner -- and a suitably sensitive flank has been renewable energy.

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