"The 600 MW would account for 50 percent of our total generation capacity at that stage," he added.

MVV, the country's only listed municipal utility, last year regrouped its renewable divisions into a separate unit to expand in several European countries.

According to MVV's annual report, its present biomass capacity is 8.8 MW and its wind capacity is 20 MW.

In Germany, MVV would be taking advantage of a law known as EEG, which was inspired by environmental concerns and provides for subsidy of renewable capacity.

The law is supported by a cross-party consensus and therefore offers planning security, Farrenkopf said.

He said a the briefing that some new processes, in their early stages, were not yet competitive.

But the introduction of emissions trading might create instruments "within a decade to largely avoid EEG costs and give the sector a much more market-oriented character," he said..

Under the EEG law, above-market revenues are charged for green power sales and the cost is spread among all consumers.

This is in support of national targets to increase the percentage of power output derived from renewables to 12.5 percent in the 10 years to 2010 from seven percent now.

EU laws aim to raise the share of renewables to 22 percent by 2010 from 14 percent currently across the 15-nation bloc.

MVV chief executive Roland Hartung said a 20 MW biomass plant at Koenigs Wusterhausen would start operating in June or July as the first commercial venture in MVV's 155 million euros ($167.4 million) bio energy project portfolio.

Another 15 MW biomass plant at Floersheim-Wicker and a 20 MW venture at Mannheim were due to start producing power from the end of this year. All three will be timber-fired.

MVV also has definite plans for wind park projects totalling several hundred MW. A project for a solar module production facility has been put on hold as it is currently not feasible.

The EEG law is due to be rejigged this year to give more sponsorship to solar, biomass and offshore wind projects while cutting payments to increasingly efficient land-based wind farms.