Germany confirms clean energy policies -- Post election confidence

Renewable energies seem to have emerged as clear winners from Germany's national elections, which returned the Social Democratic Part (SDP) to another four years of government. While the SDP and its government partner, the Green Party, found plenty to argue about in the energy sector -- from coal subsidies to continued operation of nuclear power stations -- they rapidly found common ground on renewables.

Responsibility for renewable energies is to be shifted from the economics ministry to the federal environment ministry, with Jürgen Trittin of the Green Party at the helm. Trittin is expected to be far more sympathetic to the cause of renewables than new economics minister, Wolfgang Clement, who has been a strong promoter of coal.

The two governing parties have reiterated their targets for green energy. The share of renewable energies in primary energy supply is to double from 2.1% in 2000 to 4.2% in 2010, as will the contribution of renewables to electricity generation, from 6.2% to 12.5% over the same period. The governing parties also agreed that Germany's renewable energy law, Erneuerbare-Energien-Gesetz (EEG), will remain in place, though its fixed tariff payments for electricity from each technology will be adjusted downwards where appropriate.

The target for offshore wind generation is 500 MW by the end of 2006 and 3000 MW by the end of 2010. The 2006 deadline by which offshore projects must be operational to qualify for the full nine years of premium tariff rates under the EEG will probably be extended to the end of 2010. Aside from the EEG, wind receives no other direct benefits, such as funding under the Marktanreizprogramme renewables support program.

Other energy policy decisions will have little or no impact on wind. Coal subsidies will continue to decrease under a 1997-2005 plan, while gas power production is largely exempt from a planned increase in gas tax. The phasing out of nuclear power by about 2021 is confirmed and state support for development of nuclear technologies for electricity will stop. An initiative to encourage farmers to become "energy harvesters" is aimed at stimulating biomass, not wind energy.

New efforts on climate protection, however, could indirectly benefit wind. After lengthy opposition, the federal government now supports the introduction of an emissions trading system for greenhouse gases. It also wants the EU to target a 30% reduction in greenhouse gases by 2020 compared with 1990; Germany is targeting a reduction of 40% over the same period.

The SDP and Greens coalition agreement highlights the pledges made by Chancellor Gerhard Schröder at the Johannesburg summit on sustainable development in September. Renewables co-operation and energy co-operation initiatives with developing countries have each been granted EUR 500 million over five years.