Merkel May Ease Cuts for Onshore-Wind Subsidy to Save Jobs

Apr 01, 2014 9:44 am ET

(Updates with Merkel comments in fourth paragraph.)

April 1 (Bloomberg) -- Chancellor Angela Merkel may ease proposed cuts in aid for wind power as she seeks to win backing for her green-energy plans from German states concerned about job losses, a state premier involved in the talks said.

Schleswig-Holstein, backed by at least three other northern German states, expects to strike a compromise on wind power with Merkel at a meeting in Berlin today after extended negotiations with the Economy Ministry, state premier Torsten Albig said by e-mail. Albig’s region bordering Denmark added the most onshore wind capacity of any German state in 2013.

Merkel and leaders of the country’s 16 state governments plan to meet at 6 p.m. to discuss changes to clean-energy subsidies. The German government is seeking to cut the cost of Merkel’s unprecedented program to close nuclear reactors and replace them with renewable energy such as solar and wind.

“If we spend more on one thing, we’ll have to find savings elsewhere, so the room for compromise is limited,” Merkel told reporters in Berlin today. It’s “not particularly likely that we’ll reach an agreement already this evening.”

Schleswig-Holstein, Bremen, Hamburg and Lower Saxony want the government to avoid cuts to projects that replace older wind turbines, known as repowering. The current plan is for a yearly cap of 2.5 gigawatts for onshore wind installations.

The Economy Ministry declined to comment when contacted by phone.

From Schleswig-Holstein in the north to Bavaria on the Alpine rim in the south, German states are competing to stall plans presented in January to scale back aid for new clean-power projects.

Merkel says the “Energiewende,” or energy switch, is her most important project. She has set a deadline for April 8 to get states and industry to back legislation setting new subsidies and capacity caps in a major overhaul to the 14-year- old EEG clean-energy law.

Economy and Energy Minister Sigmar Gabriel is open to reducing the electricity tax, he told ARD television on March 30. He didn’t comment on repowering. Lower Saxony Premier Stephan Weil has demanded a lower tax on power.