* Shif in power systems to cost 335 billion euros
* Difficult cash calculations deter investors
* If doesn't act fast, Germany might turn net importer
FRANKFURT, June 25 Germany needs a master plan
that brings together central and local government policy and
provides certainty for investors and project firms if it is to
find the $420 billion needed to fund a radical shift towards
green power, a study said on Monday.
HypoVereinsbank (HVB), a unit of Italy's UniCredit
, put the cost of what Germans call the "energy U-turn"
- its move to switch off nuclear plants, increase wind and solar
power generation and improve power grids - at 335 billion euros
Europe's biggest economy needs substantial investment to
build up renewable capacity and connect it with the nine
countries on its borders, it said.
Investments in plant and infrastructure would amount to 85
billion, while 250 billion would be needed for support payments
to renewable energies, the study estimated.
"In core areas of the energy U-turn, project financing is
currently only possible to a limited extent, because revenue and
expenditure cannot be sufficiently gauged," HVB board member
Lutz Diederichs said in a statement.
"This makes the calculation of cash for the projects
difficult," he added.
By 2020, 35 percent of all Germany's electricity is meant to
come from renewable resources, compared with 20 percent now.
Germany also has decided to phase out of nuclear power
completely by 2022, faster than originally planned, in the wake
of the Fukushima nuclear disaster. The reactors had provided 23
percent of its power supply in 2010.
The HVB study, done jointly with the HWWI economic research
institute in Hamburg, said a master plan was needed to bring
together central government and state strategies, to ensure the
integration of new power sources and to clarify the jobs to be
undertaken by private versus public partners.
One obstacle to obtaining financing for renewable projects
is that income from wind and solar can be unpredictable because
it relies on weather.
For offshore wind farms in particular, questions also remain
over liabilities for technical problems and maintenance as well
as the lack of cable connections to onshore grids.
HVB recommended that some mechanism be found to stabilise
cash flows from projects that account for at least half of the
overall investment volume.
HVB said new international banking rules, dubbed Basel III,
would make lending to renewable energy and grid projects, which
tend to be for the long term and involve high risk, even more
difficult and expensive.
Basel III requires banks to improve their risk-management
systems and hold more capital as a safety buffer in case of
economic or financial downturn, raising the bar for outlays on
HVB recommended that banks, as well as making loans, should
act as intermediaries to help raise funding from investors for
"A successful implementation also hinges on acceptance by
the population. So far, there are big discrepancies between the
public perception and the realities of the energy shift,"
Michael Braeuninger, lead author at the HWWI, said.
The authors were also concerned about the need for speed in
creating storage for power and in building up transmission
networks in time to prevent Germany from having to import more
($1 = 0.7977 euros)
(Reporting by Vera Eckert, additional reporting by Jonathan
Gould, editing by Jane Baird)