Germany needs work before atom exit: EU official

VIENNA (Reuters) - Germany will need to improve its energy infrastructure and storage capacity and ramp up production of renewables to ensure supply when the last of its nuclear reactors is shut in 2022, a senior EU official said.

The ruling coalition on Monday announced plans for Germany to exit nuclear power, in a significant reversal of policy in light of Japan's Fukushima nuclear crisis.

"Germany's energy policy will only work if there are improvements at the same time as the exit," European Union energy commissioner Guenther Oettinger said on the sidelines of a conference in Vienna on Monday.

He said there was a need for better grid infrastructure, storage capacity and forward planning as well as a more pronounced rise in renewable supply than previously planned.

To accompany the nuclear exit, Germany plans to cut electricity usage by 10 percent and double the share of renewable energy sources to 35 percent by 2020, according to a government paper seen by Reuters.

Oettinger said nuclear would continue to play an important role in Europe because countries such as France rely on it for their electricity supply.

Gas will become an even more important energy source for Europe following Germany's decision, he said.

"We need more gas. After Berlin's decision gas will be a driver of growth," he told the conference.

He said the EU-backed Nabucco gas pipeline, which has faced delays and a rise in costs, would be a boon for Austria as well as Europe.

Austria's Baumgarten gas hub is the planned end-point for the pipeline which aims to bring gas to Europe from the Caspian region and Middle East from 2017 and reduce dependence on Russian gas.

"If Nabucco happens, it will also strengthen Austria's economy and the importance of the Vienna hub," he said.

Austria's OMV runs Baumgarten and is one of Nabucco's six shareholders.

Fresh gas supplies were important because Europe's energy demand was growing but production falling, leaving it very reliant on imports, Oettinger said.

(Reporting by Sylvia Westall and Angelika Gruber; editing by Jason Neely)