Merkel Drive to Slash Emissions at Risk as Green Power Splutters

(Bloomberg) -- Chancellor Angela Merkel’s sweeping plan to slash carbon emissions may be in jeopardy as onshore wind, the main driver of green power, faces years of weak growth and, at worst, contraction.

Ensnared by a thicket of environmental rules, construction of scores of wind parks across the country are delayed, resulting in investors staying away from auctions and the number of new installations to plummet. First-half capacity additions dropped to the lowest since 2000.

Adding to the industry’s woes, thousands of turbines backed by subsidies may become idle early next decade as contracts begin to expire. The cumulative effects of subsidy retirements and intractable bureaucracy pose a threat to Merkel’s aim to carve out a 65% share for clean energy by 2030 from about 40% now, say lawmakers and the BWE industry group.

Merkel and her coalition cabinet in Berlin are trying to hammer out a comprehensive roadmap for curbing CO2 pollution by 2030, nudged by hard evidence that Germany is set to miss a 2020 target.

“The whole sweeping project relies on achieving that clean energy milestone,” said Matthias Miersch, deputy caucus chairman of the Social Democrats, Merkel’s allies.

Led by onshore wind, clean energy overtook coal last year as Germany’s prime source of electricity generation. While the power it generates fluctuates, onshore wind has the biggest installed capacity of all sources, equal to about 54 gigawatts in a national inventory of 205 gigawatts.

“That throne seat for wind is deceptive,” said Christoph Zipf, spokesman of the BWE industry federation, which represents wind developers, equipment makers and investors.

About 4 gigawatts of onshore wind power will cease to be subsidized in 2021 as the first batch of 20-year contracts expire, said Zipf on the phone this week. By comparison, new additions next year may add as much as 1.5 gigawatts “with no light at the end of the tunnel in subsequent years,” he said.

“Credibly, without solutions we may even see a net standstill in clean power or a contraction in the worst case,” said Zipf. The BWE federation is counting on some alleviation from so-called repowering. That entails selling non-subsidized power in the wholesale market after refurbishment with modern equipment.

As it deliberates over climate policy in Berlin, Merkel’s coalition vowed to double down on cutting through wind power’s legal problems to speed up approving new parks. Reducing red tape will depend partly on taking on the country’s strict environmental rules.

To contact the reporters on this story: Brian Parkin in Berlin at bparkin@bloomberg.net;Birgit Jennen in Berlin at bjennen1@bloomberg.net

To contact the editors responsible for this story: Reed Landberg at landberg@bloomberg.net, Lars Paulsson, Andrew Reierson

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