Pre-election politicking causing damage in Germany

Next wave of offshore wind deals stalled due to investor uncertainty

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Investment uncertainty being caused by pre-election politicking in Germany risks doing lasting damage to the country's offshore wind industry, according to several of the sector's key players, gathered in Hanover this week for the country's largest industrial trade fair.

"We are not against politics, but the short term measures being discussed that would introduce "a brake on electricity prices are fatal for Germany", according to Thorsten Herdan, vice president of offshore wind foundation, Stiftung Offshore. Herdan objects strongly to the "collateral damage caused to offshore wind by politicians in their efforts to create a strong profile in the run-up to federal elections".

Federal elections will take place in September. Earlier this year, Germany's federal environment and economy ministers proposed a series of measures aimed at reducing the cost to households of funding renewable energy generation. These proposals have raised the spectre of unwelcome changes – including reductions – to Germany's feed-in tariff for offshore wind.

An energy policy summit on 21 March, attended by Chancellor Angela Merkel, failed to rule out the possibility of a FiT reduction for existing offshore projects, according to Herdan. It also failed to clarify whether such a cut would apply to projects for which supply contracts have been signed, for which finance or permitting has been clinched, or for which offshore cables have been agreed, he argues.

Stiftung Offshore now awaits a decision at the end of May about whether the government intends to pursue measures for implementation before September's elections.

The chief executive of turbine manufacturer REpower Systems, Andreas Nauen, agrees that recent polticking has had a negative impact. "Offshore wind will continue in Germany in 2013 and 2014 due to past decisions, but the next wave of development is missing. Customers are not able to take investment decisions."

Another warning comes from the chair of Alstom Deutschland: "Until now, Germany shown the way; now it`s taking risks especially when it comes to foreign investors".

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