* Executives lament lack of progress
* shift will cost 1.7 trillion eur by 2030 -Siemens
* GDF Suez says better investment climate necessary
By Christoph Steitz and Vera Eckert
BERLIN, Jan 18 Progress in Germany's
energy shift away from nuclear power is painfully slow, hampered
by what energy sector executives say are inadequate incentives
and a lack of strong investors, suggesting it will be Herculean
Germany, prompted by the March 11 earthquake and tsunami
last year that caused a disaster at Japan's Fukushima plant,
decided to abandon nuclear power by 2022, leaving a large energy
gap to fill.
Almost a year on, not much has happened to develop
alternatives, executives of Germany's energy industry complained
at this year's Handelsblatt Energiewirtschaft conference in
Berlin, the agenda-setting meeting at the start of each year.
"Since the energy shift was announced, not much has
happened," said Michael Suess, a board member at German industry
conglomerate Siemens who is in charge of the group's
"We finally need to gain traction now," he said.
Switching off all 17 nuclear plants by 2022 will lead to a
power gap of more 20,000 megawatts (MW) and the German
government is focusing its plans on new gas plants, as they are
friendlier to the environment than coal plants.
Utilities, are less keen. They say high natural gas costs,
still mostly tied to oil with its inbuilt geopolitical price
premiums, and low power prices make gas plants an unprofitable
"The goals is very ambitious -- this will not be easy," said
Juergen Grossmann, chief executive of Germany's No.2 utility RWE
One of the top priorities is the expansion of transport and
distribution networks for power from renewables sources
including wind and solar, Germany's new favoured form of energy.
The task is being delayed by protests and overly long
procedures to approve new grids and existing grid revamps, which
in some cases take more than 10 years.
New power networks are necessary to transport power from
renewable sources, notably wind energy, to the south of Germany
from wind turbines in the north, which will be increasingly
placed in the windy high seas offshore Germany.
German energy agency DENA estimates 3,700 km of networks to
transport maximum voltage need to be built by 2025. In the past
few years, however, only 100 km have materialised.
Siemens estimates that Germany's energy shift will cost up
to 1.7 trillion euros ($2.17 trillion) by 2030, most of which
will be borne by taxpayers and power consumers.
Germany's roughly 900 municipal utilities, seeing a chance
to gain more control over future markets, aim to invest billions
of euros in new power plants and more than double their share in
power production to 25 percent over the next 10-15 years.
The top ten public utilities have said 10 billion euros in
investments would be possible over the next 10 years.
However, executives agreed a more favourable investment
climate was needed to make the envisaged shift become reality.
"The energy sector in Europe must attract private
investments and not just through subsidies," said Gerard
Mestrallet, chief executive of French utility GDF Suez.
Renewable power - still heavily subsidised to be competitive
against conventional energy sources - is to account for at least
35 percent of Germany's total electricity mix, up from 20
percent now, according to government targets.
With 7.6 percent, wind power accounts for the greatest share
of renewables in Germany's energy mix, and according to industry
body BDEW capacity stood at 27,000 MW by mid-2011.
But only a fraction of this is offshore. Only 54 turbines
with a total capacity of 210 MW are so far located off Germany's
This suggests Germany's goal of installing about 7,600 MW in
offshore capacity by 2020 and 25,000 MW by 2030 seems overly
ambitious. Germany's Environment Ministry said that to hit the
2030 target, up to 1,500 MW must be installed per year, or one
turbine per year during Germany's "fair weather season" that
accounts for about half of the year.
Solar power accounted for only 3.2 percent of Germany's
energy mix in 2011, while swallowing up 8 billion euros, almost
half of all renewable energy costs borne by the country's
consumers. The government wants to increase that share to 10
percent by 2020.
"Photovoltaic (energy) in Germany makes as much sense as
growing pineapples in Alaska," RWE's Grossmann said, referring
to Germany's limited sunshine.
($1 = 0.7851 euros)
(Additional reporting by Tom Kaeckenhoff, Anneli Palmen and
Markus Wacket; Editing by Anthony Barker)