The German parliament on Friday passed a law to reform the system of renewable energy subsidies, clearing the first hurdle for Chancellor Angela Merkel‘s election promise to curb rising energy prices.
Responding to public opposition to nuclear technology, Germany is gradually shutting down all its nuclear power plants, which once delivered a quarter of its electricity.
Compulsory surcharges on energy bills are subsidizing new investment in renewable energy. But Merkel has been under pressure to alter the system of regulated prices to spread the burden more fairly.
Germany‘s lower house of parliament, the Bundestag, adopted the course correction in a 454-123 division amid grumbling from environmentalists and investors who say they need the rebate to remain competitive internationally.
Private investors built wind turbines on farms, solar panels on house roofs and giant tanks to convert farm manure into methane with the aim of filling the gap left when nuclear power is phased out in 2022.
But the wave of renewable power came too fast and too strong, raising fears that consumers and industry would face even higher surcharges.
"We have a drastic case of over-subsidizing here," Sigmar Gabriel - head of Merkel‘s junior coalition partner - told the Bundestag, adding that spending on renewables had risen 200 per cent since 2010.
German public opposition to nuclear power and enthusiasm for renewable energy dates back to the 1980s. Public opinion swung decisively against nuclear power after the 2011 partial meltdown of nuclear reactors at Fukushima, Japan.
The pricing reform still faces challenges. The European Commission warned this week that the surcharges system does not comply with EU competition law and discriminates against power imports to Germany.
The law still needs the approval of the upper house of parliament and the commission.