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Germany eyes cap for support for wind power, biomass

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By Holger Hansen

BERLIN, Oct 11 (Reuters) - Germany's environment ministeroutlined plans on Thursday to limit support for wind energy andbiomass generation following a similar cap imposed on thephotovoltaic sector, as part of a proposed reform of renewableenergy policy.

Peter Altmaier also raised Germany's green targets, sayinghe wanted renewables to account for 40 percent of total powerproduction in Germany by 2020, up from 25 percent now and anoriginal target of 35 percent.

The increase came as no surprise, given the rapid expansionof green energy sources in the last few years, especially in thesolar sector due to incentives which are now being scaled back.

Altmaier gave no concrete details on his proposals, whichare unlikely to get through parliament before next year'selection. He said he aims to have a draft law by the end of Maybut has repeatedly said that he will not be rushed.

Chancellor Angela Merkel is likely to be judged by voterspartly on her abrupt decision last year to accelerate Germany'snuclear phase-out after Japan's Fukushima disaster and to movemore swiftly to renewable forms of energy.

"I am convinced that the switch to renewables is right,"Altmaier told a news conference, adding that a law originallydrawn up over a decade ago by a different government neededchanges.

For years, green power has been fed into the electricitygrid and paid for at above-market rates but the government thisyear set limits on the booming photovoltaic sector due partly tofears that the incentives were causing price distortions.

The expansion of solar energy has been capped at 52,000megawatts, about double the installed capacity. Once that levelis reached, there will be no price guarantees, said Altmaier.

"Similar regulations lend themselves to wind and biomass,"said the minister in a paper he presented to reporters.

The minister is trying to soothe fears about risinghousehold electricity bills before next year's election.

Merkel's government has come under fire for making privateconsumers and small businesses bear the brunt of the cost ofswitching to renewable energy with an expected sharp increase ina surcharge next year. .

The government has also drawn criticism for grantingexemptions to big energy-intensive heavy industry companies fromgreen energy and network tariffs.

The opposition Social Democrats (SPD) accused the governmentof "window dressing".

"It is not the growth of renewable energy that is drivingprices but the government's serving of lobby groups and makingwrong decisions," said senior SPD lawmaker Ulrich Kelber.

(Writing by Madeline Chambers; Editing by Gareth Jones andDavid Cowell)

((Madeline.Chambers@thomsonreuters.com)(+49302885230)(Reuters

Messaging: ann.chambers.reuters.com@reuters.net))

Keywords: GERMANY ENERGY/