Bavaria threatens Merkel over energy policy

In a direct challenge to Chancellor Angela Merkel on Wednesday, Bavarian State Premier Horst Seehofer warned that his state will go it alone if the government doesn’t speed up the nuclear phase-out.

Bavaria threatens Merkel over energy policy
Photo: DPA

Seehofer’s threat was published in the Süddeutsche Zeitung just hours before Merkel was due to meet with the state premiers to discuss Germany’s ambitious plan to decommission all nuclear power stations by 2022 and make up the energy shortfall with renewable sources.

The comments follow criticism from industry and business heads who say the energy transition is in urgent need of a clear plan and tighter coordination between the state and the regional governments, wrote Stern newspaper.

If the nation’s “most important domestic project” doesn’t get off the ground soon, Seehofer told the Süddeutsche Zeitung, he will push for a return to the old system, under which former state-owned utility company Bayernwerk supplied Bavaria’s electricity.

“We’ll found a [new] Bayernwerk,” he told the paper.

The comments are the more incendiary because Seehofer is head of the Christian Social Union, the Bavarian sister party and coalition partner to Merkel’s Christian Democratic Union.

Seehofer also said it was vital that Bavaria became self-sufficient in its energy needs. “We want to produce the energy needed in Bavaria in Bavaria,” he added.

Last year the Bavarian state government decided the state would decommission its nuclear plants by 2022. The original plan had been to double the share of energy generated from wind and hydro sources to 50 percent of the state’s energy needs.

The rest would have come from conventional energy sources – including 5 new gas plants. Seehofer said Bavaria could revise its own energy plan, relying less on gas powered stations and more upon a large number of small bio-fuel plants to bridge the gap.

The bio-fuel plants – which would run on manure and agricultural waste from Bavaria’s many farms – could generate up to 2,000 megawatts of energy, around half the amount needed to make up the shortfall from the decommissioned nuclear plants in the state.

“I think that’s realistic,” said Bavaria’s Agriculture Minister Helmut Brunner whom Seehofer has tasked with checking the plan in detail, reported the paper on Wednesday.

As it stands, Germany’s historic experiment – which is being keenly watched by the rest of the world – is in danger of faltering. The energy industry has been slow to invest in the necessary large-scale infrastructure changes, something Seehofer put down to a lack of financial incentives by the state.

“There is danger in delay,” Seehofer told the paper. He even demanded that politicians “work through the whole summer break,” to end the current stalemate.

Failure, however, is not an option. In fact, said the politician, it would spell “political meltdown” for Merkel’s government.

The Local/jlb

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German government announces fresh relief package for high energy costs

With Russia's invasion in Ukraine exacerbating high energy and petrol prices, Germany is set to introduce a second relief package to limit the impact on consumers.

German government announces fresh relief package for high energy costs

The additional package of measures was announced by Economy and Climate Protection Minister Robert Habeck (Greens) on Sunday.

Speaking to DPA, Habeck said the wave of price increases throughout the energy sector were becoming increasingly difficult for households to bear.

“Extremely high heating costs, extremely high electricity prices, and extremely high fuel prices are putting a strain on households, and the lower the income, the more so,” he said. “The German government will therefore launch another relief package.”

The costs of heating and electricity have hit record highs in the past few months due to post-pandemic supply issues. 

This dramatic rise in prices has already prompted the government to introduce a range of measures to ease the burden on households, including abolishing the Renewable Energy Act (EEG) levy earlier than planned, offering grants to low-income households and increasing the commuter allowance. 

READ ALSO: EXPLAINED: What Germany’s relief package against rising prices means for you

But since Russia invaded neighbouring Ukraine on February 24th, the attack has been driving up energy prices further, Habeck explained.

He added that fears of supply shortages and speculation on the market were currently making the situation worse. 

How will the package work?

When defining the new relief measures, the Economics Ministry will use three criteria, Habeck revealed. 

Firstly, the measures must span all areas of the energy market, including heating costs, electricity and mobility. 

Heating is the area where households are under the most pressure. The ministry estimates that the gas bill for an average family in an unrenovated one-family house will rise by about €2,000 this year. 

Secondly, the package should include measures to help save energy, such as reducing car emissions or replacing gas heating systems.

Thirdly, market-based incentives should be used to ensure that people who use less energy also have lower costs. 

“The government will now put together the entire package quickly and constructively in a working process,” said Habeck.

Fuel subsidy

The three-point plan outlined by the Green Party politician are not the only relief proposals being considered by the government.

According to reports in German daily Bild, Finance Minister Christian Lindner (FPD) is allegedly considering introducing a state fuel subsidy for car drivers.

The amount of the subsidy – which hasn’t yet been defined – would be deducted from a driver’s bill when paying at the petrol station. 

The operator of the petrol station would then have to submit the receipts to the tax authorities later in order to claim the money back. 

Since the start of the war in Ukraine, fuel prices have risen dramatically in Germany: diesel has gone up by around 66 cents per litre, while a litre of E10 has gone up by around 45 cents.

READ ALSO: EXPLAINED: The everyday products getting more expensive in Germany

As well as support for consumers, the government is currently working on a credit assistance programme to assist German companies that have been hit hard by the EU sanctions against Russia.

As reported by Bild on Saturday, bridging aid is also being discussed for companies that can no longer manage the sharp rise in raw material prices.

In addition, an extension of the shorter working hours (Kurzarbeit) scheme beyond June 30th is allegedly being examined, as well as a further increase in the commuter allowance.