* Merkel met industry, green groups on switch to renewables
* Worry about rising consumer power prices before election
* Big companies should brace for cuts to exemptions
(Adds economy ministry proposal)
By Madeline Chambers
BERLIN, March 7 German Chancellor Angela Merkel
warned on Thursday that time was of the essence if Germany was
to shift to renewable energy and power intensive industries
should expect cuts to their benefits and exemptions.
Merkel's ambitious switch to green energy from nuclear,
known as the 'Energiewende,' is seen as a key domestic policy of
her second term. Renewables are expected to account for 35
percent of German power in 2020 and 80 percent by 2050.
But six months before a federal election, questions remain,
not least how to pay for the shift. Consumers are wary about the
extent to which they will foot the bill and Merkel wants to
reassure voters that she is trying to curb steep rises in power
prices caused in part by subsidies for renewable energy.
Merkel, ministers, environmental and industry groups and
unions discussed on Thursday the transition and expansion of the
power grid to transport energy from new sources.
"There was no doubt that we want a successful Energiewende.
That does not mean that all problems have been solved, but we
agreed it is a process ... and that time is pressing to get the
necessary tasks done," Merkel said.
"We are in the process of overhauling the grid exemption
On Wednesday, a court in Duesseldorf ruled that exemptions
from charges for the power grid, which saved big industry 300
million euros ($390 million) last year, were unlawful.
The exemptions have forced consumers to pay more because 20
percent of their bills are for a transmission network charge.`
The European Commission also said on Wednesday that it would
investigate exemptions for big companies on the grid charge,
saying they might breach rules on state aid.
According to proposals by the economy ministry made
available to Reuters, the government is considering scrapping
the total exemption with the exemption in future stretching to
But Ulrich Grillo, head of the BDI German industry
federation and a critic of what he called the lack of management
of the Energiewende, warned against placing too great a burden
Energy-intensive companies, which wield considerable
influence in export-oriented Germany, also enjoy waivers on the
renewables surcharge and pay lower tax for electricity.
Merkel also said the European Union must consider the
long-term structure of its carbon Emissions Trading Scheme (ETS)
and if necessary take action.
Asked for her view on the EU proposal to rescue the carbon
market in the short term by withdrawing some emission permits,
she said: "In our talks today it became clear that we must think
about how the structures will look after 2020 for carbon
"Many (people) from the business perspective said we need
investment security and the government will look at this and, if
necessary, make arrangements."
The environment and economy ministries have so far been
divided on the EU's proposed short-term fix, known as
"backloading," and Germany has taken no official position.
It was unclear whether her comments signalled a possible
openness to holding back permits, or whether she was siding with
some EU states and lawmakers who have been withholding support
from backloading because they favour structural reform.
($1 = 0.7692 euros)
(Additional reporting by Alexandra Hudson, Markus Wacket.;
Editing by William Hardy, Jane Baird and Andre Grenon)