German utilities urge market reform for renewables sector
* Utilities lobby takes aim at costly green energy subsidies
* Proposals timed to shape post-election energy debate
* Envisage renewable producers selling directly to market
By Vera Eckert
FRANKFURT, Sept 27 (Reuters) - Operators of future renewable power units in Germany should sell their output directly to end the spiralling costs of subsidies to consumers, utility industry group BDEW proposed on Friday.
BDEW, which normally supports the interests of thermal power plants that compete with renewables, is trying to shape Germany's energy debate as Chancellor Angela Merkel gears up for talks on a new coalition government after her victory in last Sunday's election left her short of a majority.
Merkel's "green revolution" - the shift from nuclear and fossil fuels to renewables - will be a crucial issue in the talks between her conservatives and the main opposition Social Democrats, her most likely coalition partner.
Merkel has vowed to overhaul a system of generous subsidies to renewable energy providers which has led to German consumers paying the second highest power prices in Europe and threatens the competitiveness of the country's industry.
BDEW figures show state-related taxes and fees on German power prices this year will total 31.6 billion euros ($41.8 billion), one third more than in 2012 and nearly treble the sum seen 10 years ago.
"Those on support will have to learn to stand on their own two feet," BDEW Managing Director Hildegard Mueller told a news conference in Berlin, adding "Renewables must start producing reliably and inexpensively."
Currently, most renewable power is fed into the grid without the producers having to sell it in the wholesale market. They simply collect above-market fees for the power delivered from the grid company which in turn charges consumers.
Under the BDEW proposals, approved by representatives of its 1,800 member companies, renewable units such as wind turbines and solar panels to be built in the future would not receive fixed support payments as at present and would have to sell their output in the open market.
However, they would receive a premium on top of the market price as an incentive to continue to produce green energy. Volume limits would be introduced and the current 20-year guarantee of support prices would be scrapped.
Renewables producers would also be forced to install equipment to stabilise the networks as the volatile nature of wind and solar power has often hindered the smooth functioning of transmission grids.
The BDEW plan envisages payments to reward secure supplies to thermal plants, whose profit margins have been undermined by erratic supplies.
BDEW said the changes would not generate more bureaucracy but be market-based, allowing storage operators, virtual plants and flexible renewable units to compete.
Renewable energy producers say ending support guarantees will scare off investments and prevent Germany meeting ambitious green energy targets aimed at tackling climate change.
Germany aims for renewables to make up 35 percent of its power generation by 2020 and 80 percent by 2050, up from about 24 percent now. ($1 = 0.7418 euros) (Editing by Gareth Jones and James Jukwey)
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