UPDATE - EU decision on German green energy pending
Date: 12-Oct-01
Country: GERMANY
"I don't expect there will be any threat to the law from the European Commission," Schreyer said.
But a spokesman for Competition Commissioner Mario Monti said no decision had yet been taken on whether Monti would examine government support measures for renewable producers.
Schreyer said the Commission had already approved similar support measures from the Danish and Belgian governments and that there was therefore little danger that the German measures would run into problems.
Monti spokesman Michael Tscherny told Reuters: "Schreyer has said what she is expecting - she is free to do that."
"There is a question as to whether it is state aid or not, that's still unclear. Monti did not tell Schreyer that we are not going to open proceedings. There's no decision yet."
Schreyer's remarks applied to the feed-in law for renewable energies (EEG), but the law subsidising power produced at combined heat and power plants (CHP) is part of the same complex.
An industry source said that if the existing EEG law was safeguarded, then the same principles would be applied by the EU to the CHP law, although this required a separate official process.
A new German CHP regulation is due to come into effect on January 1, 2002, replacing an existing law.
Both laws support the expansion of energy sources that are low on green house gas emissions and therefore help prevent global warming - which is one of Germany's declared political goals.
They require that regional suppliers and municipalities pay above-market prices for power from such energy sources, and then pass the additional costs on to consumers.
Prior to Monti's concern, the European Court of Justice said in the spring Germany's subsidising schemes complied with EU law because the inherent environmental goals overruled concerns about producer aid.
But according to high-ranking EU sources Monti's probe would be based on the question whether the funding would constitute state aid if the subsidised companies are themselves state-owned - many municipalities in Germany still are publicly-owned.
An industry source said the news, if confirmed, would give mixed signals to the German electricity sector.
"It's good and bad - operators of renewable energy plants would be given planning security," he said.
"But consumers are having to pay more and this has always been of great concern to energy-intensive industries."
"The laws also tie up personnel and other resources and this is annoying for the utilities and grid operators which are having to administrate them."
Green power company shares in the German equity market rose on Thursday in the wake of Schreyer's remarks, but analysts pointed out that they believed Monti was the decisive figure in the debate.
