September 10, 2013 / 4:06 PM / 6 years ago

German power sector demands clarity on offshore wind returns

* Groups plead for rapid legislation after national polls

* Say investments will stop without planning security

MUNICH, Sept 10 (Reuters) - Germany’s mainstream power sector, needing a stable source of renewable electricity, backed its wind power rivals in saying that development of offshore wind will halt unless it gets fast assurances on future earnings potential.

The BDEW industry association, which normally supports the interests of thermal power plants that compete with renewables, joined the VDMA Power Systems turbines group on Tuesday in demanding rapid legislation soon after parliamentary elections on Sept. 22.

A VDMA expert said uncertainty over expected reductions in government incentives for green power has discouraged fresh investment, hindering various big projects now in the pipeline.

“Our members will not develop any more offshore wind units unless planning becomes possible again,” said Power Systems chief Thorsten Herdan.

“It looks like a success story but right now, it is mere execution of previous projects. Order books are empty.”

Germany is phasing out nuclear power and has been supporting renewables such as wind and solar, supply from which can be unpredictable. More constant winds mean that offshore turbines, while expensive to build, are more reliable than those onshore.

“Offshore wind parks achieve 4,500 hours of full round-the-clock power load a year and therefore contribute to supply security,” BDEW managing director Hildegard Mueller told a news conference in Munich held jointly with VDMA.

“Without offshore, the goals of the energy shift planned by the government cannot be reached,” Mueller added.

Wind energy group BWE says that this year, 385 megawatts (MW) of new offshore wind capacity has been installed, and that 1,714 MW are under construction, mainly for next year. Some 90 projects are in the pipeline, but their future is unclear.

Chancellor Angela Merkel wants to increase offshore wind as part of her push to renewables and away from nuclear energy, but government plans for 10,000 MW by 2020 appear impossible.

Installing turbines has turned out expensive and slow and connections to onshore grids have not been constructed in time.

“We will be lucky to manage 6,000 MW,” Herdan said.

Investors needed a signal that expected returns on their spending are guaranteed at a given date, so as to ensure that cuts in renewable subsidies - believed to be certain for future capacity - will not lead to stranded investments, he said.

Already, decreases in support payments now set to kick in for 2018 and based on hopes for technological improvements by then, were set to be disastrous, Herdan said. (Reporting by Vera Eckert; Editing by Anthony Barker)

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