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German CDU-CSU backs single power zone, GHG targets

03 Jul 2017 15:31 (+01:00 GMT)
German CDU-CSU backs single power zone, GHG targets

London, 3 July (Argus) — Retaining Germany's single power market bidding zone and market-based measures to meet greenhouse gas (GHG) targets would take priority if chancellor Angela Merkel's CDU-CSU union is re-elected this year. Merkel is seeking a fourth term in office at 24 September elections.

Her CDU party presented a joint election manifesto with Bavarian sister party the CSU today, committing to GHG reduction targets that the coalition government with the SPD set in last year's 2050 climate protection roadmap — a result of months of political dithering between the CDU-CSU and SPD.

The roadmap, which is not legally binding, sets sectoral GHG reduction targets for 2030 relative to a 2014 baseline — including emissions cuts of 50pc in the energy sector — and includes a clause that allows Germany's next government to review sector targets in 2018. The CDU's influential economic council signalled earlier this year that it does not support the 2030 energy sector goals.

Although the manifesto says the roadmap targets will not be questioned by the CDU-CSU union, the parties have said that they oppose regulatory interventions and will rely on market-based instruments to cut GHG emissions. This decreases the likelihood of a German legal mandate to exit from coal and lignite-fired power generation within the next four years, should the CDU-CSU win the election.

Germany must end lignite mining and lignite-fired power generation "in the medium to long term", Merkel said. But the CDU-CSU wants to offer a plan for affected regions — mostly areas in eastern Lausitz, and central west North Rhine Westphalia — before detailing where mining jobs would have to go, Merkel said.

Cost-efficiency and market-based measures are cornerstones to complete Germany's transition towards an increasing share of renewables in the country's energy mix, the election manifesto said. The CDU-CSU will prioritise speeding up Germany's grid expansion programme to eliminate internal supply bottlenecks, it said. The European Commission has signalled that it would consider splitting the German power market into more than one bidding zone if internal bottlenecks persist, resulting in grid congestion in neighbouring countries. But a market split would result to rising wholesale power prices in southern Germany, the hub for energy-intensive industries. The CSU opposed most of Germany's high-voltage power line extension projects, until the CDU and SPD agreed that many of the new cables would be laid underground.

The CDU-CSU manifesto does not explicitly mention plans for Germany's flagship renewable energy act (EEG) subsidy programme. The CDU has previously said that it would consider replacing the EEG with an alternative subsidy scheme by 2021. But the parties support increasingly exposing renewables to market economics and taking a greater role in providing system stability — without detailing measures they would take to do so.

And they will support "modern power storage technologies", including domestic production of battery cells, and so-called sector coupling in 2017-21 — the electrification of the transport and heating sectors.

The CSU will now being work on a separate plan for Bavaria, which it aims to present at the end of July, although this will not contradict the joint election manifesto, party chairman Horst Seehofer said.