No deal, but Merkel rules out retroactive FIT cut

German Chancellor Angela Merkel and state premiers today failed to reach an agreement over government proposals for cuts to support for renewables.

But Merkel made clear that at least a proposal for retroactive cuts to feed-in tariffs (FITs) is off the table – as Rechargefirst reported earlier this week.

“That’s an important signal and should calm down all those who want to invest in such installations or operate them,” Merkel told reporters after the meeting.

Environment minister Peter Altmaier and economics minister Philipp Rösler in February proposed a series of measures aimed at stopping electricity prices from rising further.

Among them was the additional 1.5%-cut in FITs to already-producing plants, which now won’t go ahead.

Renewables groups and opposition politicians had rallied strongly against such retroactive cuts to support.

“Legal security for investors is the decisive outcome of today’s summit,” said Hans-Josef Fell, Green Party MP and energy expert.

Merkel needs the support of German states, because the Social Democrat-Greens-led opposition to her government at the federal level currently holds a majority in the Bundesrat, Germany’s upper chamber representing states, which could be used to block the plan.

Merkel’s Chancellery and the offices of state premiers will now continue to talk and work on a report until May, trying to find a solution to the impasse on support.

“Whether that will succeed, we will see,” Merkel said.

Altmaier and Rösler in their proposal had also suggested an across-the-board cut to onshore wind power FITs to €0.08 per kWh from around €0.09 per kWh now, and a five-month moratorium before any FITs are paid for new renewable installations, apart from PV.

Renewable energy groups welcomed news  that the government proposals for retroactive FIT cuts weren’t supported by German states, but warned that the failure of today’s talks did not remove all the uncertainty created by the plans.

“Minister Altmaier with his proposals contributed to a massive uncertainty in the sector, which today’s energy summit unfortunately couldn’t remove completely,” said Henning Dettmer, managing director of Germany’s Wind Energy Federation BWE. He added that the issue will be used in the campaign for federal elections in September.

The offshore wind group WAB demanded Altmaier scraps all his plans. “We have a whole industry with thousands of jobs from planners and developers to suppliers who want to build wind projects. But the situation for investors hasn’t improved today,” said Ronny Meyer, WAB managing director.

Offshore wind would be especially hard hit if Altmaier’s proposal for a 5-month moratorium for FITs were to become law, due to the very large investment sums involved in offshore projects.

German utility Stadtwerke München said the question of future FIT levels for renewable energy installations is still unclear. “With that, future conditions for investors are still subject to a high insecurity,” SWM said.

Some 150 protesters demonstrated against the government proposals for FIT cuts in front of the Chancellery in Berlin, among them Greenpeace activists holding up a 5-metre-high model of a wind turbine with a knot in its tower and a banner saying “Mrs Merkel, don’t trash the energy turnaround!”

German states today did agree, however, to government plans for a massive upgrade in the country’s high-voltage power lines to help integrate a soaring amount of renewable output into the country’s grid.