German govt may turn to KfW to help fund offshore wind power

BERLIN, March 22 (Reuters) - Germany's government is planning talks with development bank KfW to help bear some of the costs of expanding offshore wind parks as it tries to speed up the programme and meet renewable energy targets.

"We have agreed that we want to discuss this question (of KfW involvement) together in the committee of the KfW," Economy Minister Philipp Roesler, head of the Free Democrats, junior partners in Germany's centre-right coalition, said on Thursday.

"Everything that helps should be done," he added.

The government plans to install about 7,600 MW in offshore capacity by 2020 and 25,000 MW by 2030. Offshore wind parks were originally seen as a key driver in German efforts to meet ambitious renewable energy targets, but the parks have hit problems partly due to regulatory uncertainty.

Berlin is trying to speed up the programme to avoid missing its goals. In particular, the involvement of KfW could help grid operator Tennet, which is responsible for the connection to the North Sea Wind parks but cannot currently afford the investment.

Legal liability risks are a problem as grid operators must compensate wind park operators if power lines break down. This is discouraging them from building connections to offshore parks. Investors in the parks therefore have no guarantee they will be able to sell their power.

Environment Minister Norbert Roettgen, from Chancellor Angela Merkel's Christian Democrats (CDU), said both ministries wanted to look at a possible role for the KfW. The two ministers have clashed on other areas such as solar incentives.

A working group of both ministries, grid and wind park operators and firms such as Siemens, had suggested KfW takes on investments, either completely through suitable stakes. Later, the holdings could be sold to private investors.

The government aims to present a draft law by the summer to clear up the question of liability.

OFFSHORE PLANS

Several companies, including top German utilities E.ON and RWE, have warned that delays in the connection of wind parks to the grid could lead to the collapse of the offshore plans.

E.ON said in February that the grid operated by Tennet would connect to the utility's offshore Amrumbank wind park 15 months later than initially planned.

Wind power accounts for 7.6 percent of renewables in Germany's energy mix, the biggest share. However, only a fraction of it is offshore.

Offshore wind farms are widely seen as more efficient than onshore farms and face less opposition from residents who say they deface the landscape.

Wind energy agency WAB welcomed the government's plans.

"If the expansion of the grid is delayed further, the political goals for offshore wind will be missed. That would be a catastrophe for the German offshore wind industry," said WAB head Ronny Meyer in a statement.

Germany wants renewable power overall to account for at least 35 percent of the country's total energy mix, up from 20 percent now.

Germany's Environment Ministry has said that to hit the country's 2040 target, up to 1,500 MW must be installed per year -- equivalent to one turbine per day during Germany's fair weather season. (Writing by Madeline Chambers; Editing by Gareth Jones and David Holmes)