Merkel’s government has sought to reduce the cost of expanding wind, solar and biomass after deciding to close the Germany’s atomic reactors. It reshaped the 14-year-old EEG law granting support to renewables to try to limit aid payments expected to reach 21.8 billion euros next year. Big industrial users are largely exempt from the payments.

The reduced fee “shows that we have successfully stopped the cost dynamic of the past years,” Economy Minister Sigmar Gabriel said in a statement e-mailed by his ministry. “This will help stabilize power prices for consumers.”

‘Breathing Space’

While the reduction gives breathing space, it’s no turning point and doesn’t help companies in a significant way, according to the BDI industry federation that represents about 100,000 companies including Volkswagen AG and Siemens AG.

“It’s urgently necessary to really lower energy costs to secure the competitiveness of the German industry,” Markus Kerber, managing director of the BDI, said in an e-mailed statement. “There are already signs that consumers have to expect further costs, for example for expanding power lines or financing the shutdown of coal-fired power plants.”

Germany needs to invest 25 billion euros in power distribution networks in the next decade because of new solar and wind generators, the BDEW said in a separate statement.

The BEE, the German clean-energy lobby, expects the fee to drop again in 2016 to 6.05 euro cents and then rise again in 2017, to 6.2 euro cents, it said in a statement.

The EEG Umlage was introduced in 2000 and rose each year until now. The average household currently pays about 220 euros a year to finance the expansion of clean-energy sources, which last year provided about a quarter of the nation’s electricity.

Copyright 2014 Bloomberg

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