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Merkel's 480b euro clean power boon creates social problems

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Germany's owners of solar, wind and biomass power plants may be contributing to a social justice issue as they garner billions of euros in guaranteed fees in coming years, said a senior politician.

[BERLIN] Germany's owners of solar, wind and biomass power plants may be contributing to a social justice issue as they garner billions of euros in guaranteed fees in coming years, said a senior politician.

Green-energy operators may get as much as 480 billion euros (S$742 billion) in automatic power fees over the next 20 years, said Dietmar Woidke, prime minister of Brandenburg state. With about 8 million people benefiting directly or indirectly from the boon, less than 10 per cent of the population, the windfall from Germany's energy shift will create fairness problems, said the Social Democrat.

"That sum marks one of the biggest redistributions of wealth since 1945," Mr Woidke said in a speech Thursday in Potsdam, the state's capital. The forecast was presented to state heads May 11 at a meeting with chancellor Angela Merkel in Berlin, said Mr Woidke.

"I worked out that a three-member family will pay 18,000 euros for the energy shift in the next years. Quickly, perhaps very quickly, we're facing a social problem."

Mr Woidke's swipe at the ownership structure for clean energy in Germany will add to Ms Merkel's problems as she grapples with the biggest shift in renewables policy since guaranteed fees for green power were introduced in 2000.

Her government plans to introduce auctions for renewable power in 2017 to put brakes on green power's soaring growth and costs. A majority of Germany's state premiers oppose the plan.

With few exceptions, Germany's 83 million citizens and 3.5 million companies pay for green energy in the form of so-called feed-in-tariffs. The compulsory fees added about 23 billion euros to power bills last year as the share of clean energy in all power generation jumped to 33 per cent from 27 per cent a year earlier.

The fees helped make retail electricity prices in Germany the second-most expensive in the European Union after Denmark.

Ms Merkel has prepared a series of bills to rein in the unrestrained expansion of renewable energy. A meeting with the states' 16 premiers last week showed a majority reject her plans to limit annual auctions of wind and solar power.

While Brandenburg is supportive of Merkel's plan, it bitterly opposes a phase-out of lignite-fired power plants in the region. The state is prepared to challenge federal climate protection policy that threatens the industry, said Mr Woidke.

Ms Merkel told reporters after the meeting last week that she hopes to get all the regional heads on board for auctions by the end of the month.

BLOOMBERG