Germany struggles with transition to gas, renewables

As Germany continues to attempt to shift away from nuclear power in the wake of the nuclear accident in Japan last year, the industry continues to move at cross-purposes with the current administration, according to Reuters.

Chancellor Angela Merkel hopes to create a German economy powered primarily by renewable energy and cleaner-burning natural gas. However, utility companies continue to rely on coal-fired power plants based on a variety of the economic reasons.

At present, slumping demand in many places has led to extremely cheap coal, making it easy even for low-efficiency power plants to profit where gas-fired generators struggle because they have already paid off initial investments for the plants themselves. The low cost of carbon in the EU's emissions trading scheme has also served to discourage investment in gas.

"We need more long-term investment (in power plants), but at 6 to 8 euros for a metric ton of CO2 there is no price signal (to invest in cleaner technology)," said, Guenther Oettinger, energy commissioner at the European Commission.

Bloomberg reports the country's new energy minister, Peter Altmaier, has asked for recommendations from the energy industry on how to make the desired transition practical.

An outlook for the German power market can be found at PennEnergy's Research area.

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