21 Jan 2015
Kerstine Appunn Ruby Russell

In the media: Reactions to minister's rejection of capacity markets

Dow Jones Newswires

“Gabriel undermines electricity industry’s confidence in the Energiewende”

Writing for Dow Jones Newswires, Christian Grimm says energy minister Sigmar Gabriel has “broken his word” to the utilities. It was clearly stated in the green paper published on the future design of the energy markets that a consultation process should weigh up all of the available options before making a decision this summer. This will not happen, Grimm writes, now that Gabriel has clearly rejected the idea of capacity markets. The article says this blow comes at a time when the utilities are facing the prospect of having to cut an additional 22 million tonnes of CO2 emissions by 2020 – on top of the previously agreed 71 million tonnes. This is painful as their lignite-burning operations are still profitable. Grimm says Gabriel must keep his word this time – in December he promised that he would not force utilities to take any specific coal-power plants off the grid.

See the article in German here.


Frankfurter Rundschau

“Gabriel clears the decks”

Writing in the Frankfurter Rundschau, Frank-Thomas Wenzel welcomes Gabriel’s clear statement that he does not believe in subsidising coal and gas-fired power plants. Wenzel says capacity markets are not needed – they would only encourage overcapacity. However, an exception should be made, Wenzel writes, for highly efficient fossil-fuelled CHP plants. Current subsidies for these facilities should be extended as they provide the ideal supplement to solar and wind power generation.



"Energiewende is not a question of electricity costs"

While representatives of industry and utilities lamented the impact of the energy transition on Germany as a business hub, state secretary for energy and economy Rainer Baake countered saying: “The discussion that energy-intensive industry suffers under the energy transition should now be put behind us,” Dana Heide reports for Wirtschaftswoche. “The energy transition is not a question of electricity production costs any more, because these costs are the same for renewable and fossil energy sources,” Baake said. At the World Future Energy Summit where he spoke the day before, Germany was repeatedly praised as a model country for the energy transition, Heide writes.

See the article in German here.



“Holding on to the truth”

In an interview with the Handelsblatt, E.ON CEO Johannes Teyssen insisted that Germany will get a capacity market, despite energy minister Sigmar Gabriel rejecting the payment model for conventional power plants. Teyssen said capacity markets will “probably not come in one go but in the long-term, Germany will also get this kind of market because “in Brussels the understanding that we have to intervene has already taken hold”. Teyssen said he was convinced that the “excess promotion of renewables” meant the market could no longer give accurate price signals. “If we don’t act now, power stations will be turned off in the wrong place and at the wrong time.”

Teyssen further explained that both parts of E.ON will gain credibility when conventional power operations split from renewables and customer service in 2016. Until now, the company sold natural gas and at the same time offered consultancy on energy efficiency solutions, something that poeple they do business with could be sceptical of, Teyssen said.



E.ON CEO Teyssen on the “global energy transition”

Speaking at the Handelsblatt Energy conference yesterday, E.ON CEO Johannes Teyssen said the “global energy transition is overtaking the energy world as a national construct,” Dagmar Dehmer reports in the Tagesspiegel. Pushing the Energiewende through as a national project would fail, Teyssen said, explaining that before E.ON announced it would spin off parts of its operations into a different company, it had evaluated the woldwide power market and found it unsteady in a way that could offer great opportunities for new business models but also much opportunity to fail. Even in the US where climate sceptics are in the majority, there was a trend towards individual, decentralised customer solutions, Teyssen said.

Read the article in German here.


Survey/Dow Jones Newswires

“Survey – power producers find Gabriel’s EEG reform botched”

83 percent of German power suppliers think that changes made by energy minister Sigmar Gabriel to the Renewable Energy Act (EEG) are ineffective and negative, a survey undertaken by consultancy Oliver Wyman found. Only a third of the respondents from the power sector believed that the political framework conditions would become more stable in the near future. Oliver Wyman’s “Health-check Energiewende”, is based on a survey of 120 companies in the power and industrial sectors and 1,000 private households. Together, more than three quarters of participants judged the development of the energy sector and Germany's showcase role in energy transition to be positive. More than 90 percent of private households said the Energiewende was making an important contribution in creating and securing jobs, increasing competitiveness and reducing dependency on energy imports, as well as achieving climate targets. But 49 percent of households did not believe in a successful realisation of the Energiewende and 80 percent were concerned about rising electricity costs.

See the press release from Oliver Wyman in German here.

Download results from the “Health-Check Energiewende” in German here.

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