* Says European conventional power a no go for investors
* Says capacity market could lead way for Germany
* Economy Minister says costs could be too high
(Adds further quotes from Terium, story links, background)
BERLIN, Jan 21 Germany's shift to renewable
energy must be reconciled with the need to integrate it with
existing power plants, the chief executive of top German
electricity producer RWE said on Tuesday.
"Utilities expect a functioning and fair market system,"
Peter Terium said at a high-level energy conference, in the
presence of Economy Minister Sigmar Gabriel.
"More decentralised energy has to mean more than just the
isolated, parallel operations of many power producers," Terium
said. "We have to integrate the elements of the energy
transition in a sensible way."
Renewable power from over 1 million small wind and solar
units has reached around a quarter of total production, thanks
to generous support tariffs, which are paid independent of the
traded wholesale market.
This has squeezed the generation margins of utilities such
as RWE and E.ON, whose big, fossil-fuel-burning power
stations are losing increasing amounts of money.
Terium said that, as a result, conventional power generation
in Europe had become "a no go for investors".
Utilities want the German government to push renewables to
get unsubsidised, market prices for power. They also want
traditional power producers to be paid enough for providing
secure supply through for a capacity mechanism to compensate
them for keeping loss-making plants connected to the grid.
Terium said such a capacity market system, which is being
considered in France among other European countries, could lead
the way for Germany to align its power markets.
Economy and Energy Minister Gabriel said he was opposed to a
capacity mechanism that would include all loss-making
conventional power plants in Germany, warning that costs
associated with such a step would be too high.
(Reporting by Christoph Steitz and Vera Eckert, editing by Jane