Germany Power Report Q2 2014

Business Monitor International
March 26, 2014
102 Pages - SKU: BMI5221987
Countries covered: Germany

Germany Power Report Q2 2014

BMI View: We have long believed Germany's Renewable Energy Source Act (EEG) will almost certainly bereformed and this is now set to occur following the signing of a grand coalition agreement between AngelaMerkel's Christian Democratic Union (CDU-CSU) and the Social Democratic Party (SPD) in December2013. With SPD Chairman Sigmar Gabriel now installed at the head of a new 'super' ministry that willenable him to oversee economic affairs and energy policy, the revision of the EEG is a priority duringGermany's current legislative term - with effective reform critical to cutting the huge cost of Germany'sambitious Energiewende (Energy Transformation). Yet, while reform is necessary to stop spiking electricityprices from curbing Germany's industrial competitiveness, we emphasise that Gabriel has a difficult jobahead of him, as he tries to constrain costs of moving from nuclear to renewable, avoid seriously damagethe competitiveness of German industry, while at the same time ensuring the Energiewende is a long-termsuccess.

On December 15 2013, members of Germany's Social Democratic Party (SPD) voted overwhelmingly infavour of forming a government with the Christian Democrats (CDU-CSU), ending three months ofnegotiations. With the parties having now formed a grand coalition government and adopted a coalitionagreement, the reform of Germany's EEG is now one of the most important tasks facing the coalition. WithSPD Chairman Sigmar Gabriel installed at the head of the revamped Federal Ministry for Economic Affairsand Energy (BMWi), the revision of the EEG is a priority during Germany's current legislative term - witheffective reform critical to cutting the huge cost of Germany's ambitious Energiewende (EnergyTransformation). The debate has crystallised around the way in which the country phases out nuclearcapacity and transitions to generating electricity using a greater share of renewable sources - withoutspiking domestic electricity prices and damaging the economic competitiveness of its major industries.



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