UPDATE 1-German energy regulator: winter power supply is adequate

Tue Jan 22, 2013 2:26pm EST

* Enough reserves in place to prevent blackouts

* Flawed renewable system could be adjusted

* Investors eye German grid projects (Adds details, background, quotes)

BERLIN, Jan 22 (Reuters) - Germany's power grid is adequate in the current winter season as enough reserve capacities are in place to shield the country from disruptions after it switched off large parts of its nuclear generation plants.

"The power plant situation is under control, even if tight," said Jochen Homann, president of the Bundesnetzagentur, on the sidelines of an industry conference.

German energy regulator Bundesnetzagentur had secured 2.5 gigawatt (GW) of additional power plant assurances, which can be mobilised when high demand in the cold season overstretches supply.

So far, this has not been the case in the winter season, which ends in March or April. But as producers were thinking of idling unprofitable power plants, the system might need additional reserves in the coming winters.

Homann also said that some parts of Germany's renewable energy subsidising system could be changed in the short term, although national elections in the autumn will likely prevent an overall reform.

"Some corrections are thinkable even before the election," he said.

He said this applied to compensation for renewable power paid at times of no demand, and what he called exaggerated payments to decentralised power producers, on the basis that they help avoid investment in transmission grids.

"It is about costs which run into a triple-digit million euros figures," he said.

Homann's authority oversees a complex system of feeding green power into transmission grids in a politically desired switch by Europe's biggest economy to increasingly rely on energy from renewable sources.

INVESTORS LINE UP FOR POWER GRID PROJECTS

But the system has been revealing flaws. Rather than boosting a fledgling industry, as it was conceived, it now generates run-away costs for consumers by overcompensating producers.

Homann said another example were solar panels, where Germany added 7.6 gigawatts last year, arriving at 36 GW altogether.

"It cannot be ruled out that there will be another big addition this year," he said.

The total bill for supporting renewable energy rose to 20 billion euros in 2012 from 17.1 billion in 2011, with solar power costing over half the total, although it only contributed less than five percent of power supply.

The government last summer introduced a solar subsidy cap at 52 GW, after which special subsidies will stop.

Homann also said that investors from Germany and abroad had been asking the authority he heads about possibilities to put money into power grid projects onshore and for offshore wind.

"More than a handful of potential investors appeared."

He said that this resulted partly as Germany had cleared liability hurdles for offshore wind cable projects.

($1 = 0.7526 euros) (Reporting Vera Eckert, Christoph Steitz and Tom Kaeckenhoff; editing by Keiron Henderson)