* Costly, misses CO2 emissions cut targets, IHS says
* Seeks greater role for shale gas, mature renewables
* Says staying on current track risks Germany falling behind
* Says reform could safeguard exports, jobs, investments
By Vera Eckert
FRANKFURT, Feb 27 Germany's current policy of
rapidly deploying renewable energy should be redesigned to
prevent its industry from losing global market share because of
high power costs, a report by international think-tank IHS
said on Thursday.
The research by IHS, a global research, analysis and
specialist information group, was funded by companies in
Germany's chemical and oil and gas industries such as BASF
, Bayer and Exxon Mobil and
national business federations.
One of Chancellor Angela Merkel's most significant domestic
policies, known as the Energiewende, has been to shift Europe's
biggest economy out of nuclear power and away from fossil fuels
to a greater share of electricity from renewables.
The report said that if the policy was changed to focus on
domestically produced gas and the expansion of technologically
mature renewables such as onshore wind and solar power, Germany
could still shift to low-carbon energy while reaping more
benefits from exports, jobs, incomes, tax and royalties.
"Germany's current path of increasingly high-cost energy
will make the country less competitive," Dan Yergin, IHS vice
chairman who headed the study, said in a phone interview.
"That's why we're trying to describe a path to a more
competitive Energiewende and one that will have greater
durability," he added.
The recommendations comes as the government is urgently
seeking to reform its renewable energy law to bring down costs.
Germany's industrial power prices have risen around 60
percent since 2007, while those in the United States and China
have risen less than 10 percent.
This has hit manufacturers that accounted for 21 percent of
Germany's economic output last year, one of the highest shares
for a developed country, IHS said.
North America has become a more competitive location for
manufacturing and exporting as its domestic shale gas boom cuts
gas prices to one-third of Germany's.
IHS said the hasty phase-out of some German nuclear plants,
slow progress on energy efficiency, and a greater reliance on
coal-fired power had driven up carbon dioxide emissions by
utilities, the opposite of what was intended by the
It recommended a set of policy changes up to 2040,
especially to reverse the declining role of gas, which is now
unprofitable in power generation even though it emits half the
CO2 of coal.
Domestic shale gas production also should be developed,
rather than being shunned due to environmental concerns and
political opposition, it said.
Germany also should cut its targets for an expensive
build-up of offshore wind power, which the government has
already reduced to 6.5 gigawatts (GW) by 2020, IHS said.
Low prices for coal and carbon permits and the shutdown of
gas plants led to a 1.5 percentage point increase in German
coal-fired power production to 45.5 percent of the total last
year, figures from industry group BDEW show.
According to these figures, Germany's emissions rose
slightly last year, even though consumers paid more than 20
billion euros ($27.5 billion) to support renewables.