German state agency calls for quick energy plan

BERLIN (Reuters) - Time will soon run out for Germany to build up enough power generation if politicians continue dragging their feet on decisions over the fuel mix, German state energy agency Dena said on Monday.

As the quarrelling central coalition government remains fixated on a state-level election in May, it has delayed a raft of measures for the sector until a wider, long-term energy plan arrives in the autumn, which experts say loses valuable time.

"My plea to politicians would be to decide quickly. Otherwise, we will not have investments in time," Dena managing director Stephan Kohler told Reuters.

"Power markets will feel insecure," he said in an interview on the sidelines of a Focus magazine conference on power plants.

"There will be no new jobs and the power supply security of the coming years will be impaired."

Dena forecasts that Germany may be short some 14,000 to 16,000 megawatt of generation capacity if nuclear laws phase out reactors by 2021 as now planned and new projects for coal or gas plants fail to materialize due to public opposition.

Germany, which has around 80,000 MW of total installed capacity, expects power demand to hold stable at around 500 terawatt hours a year, as energy savings are offset by more new gadgets.

To safeguard supply, it either has to lengthen the lifetimes of nuclear plants or accelerate the expansion of renewable energies at unprecedented speed, given that coal is shunned for its carbon pollution and gas raises reliance on imports.

But the government has failed to act on its commitment to prolong nuclear plants' lives due to internal fighting between pro-nuclear Liberals and a nuclear-skeptic Conservative Party environment minister.

Elections in May in Germany's most populous state, North Rhine-Westphalia, home to leading utilities E.ON and RWE, could produce a Conservative/Green Party local coalition which could dramatically change priorities.

Kohler warned of yielding to anti-coal/gas sentiments, saying if new capacity plans fell through, this could backfire.

"If those do not materialize this would mean that old and inefficient plants would continue to operate."

"In that case, we will have much higher avoidance costs for CO2 emissions," he said.

But if carbon-free nuclear plants were to run longer, then new investments could wait, which would also cut power bills.

(Reporting by Vera Eckert)