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German government adopts new energy strategy

(29 Sep 10) Angela Merkel's cabinet adopted a new energy strategy on Tuesday, hailed by the German industry as "globally the most ambitious one of its kind". But green groups criticised the dilution of energy efficiency proposals included in an earlier draft.

The energy strategy comprises seven draft laws overseen by five ministries. At the heart of the plan lies the extended lifespan of the country's nuclear plants and some €30bn in levies that German utilities will have to pay in return.

Part of the revenues from these levies will be used to set up a fund to finance energy projects and research into new areas such as energy storage. But contributions will be lower if investment needed to comply with new safety standards exceeds €500m per plant or if the cost of storing the waste increases.

Revenues from the auctioning of carbon allowances under the EU's emissions trading scheme will be used for this fund, which will also finance renewable energy projects. The government predicts revenues of €2-3bn annually from 2013.

Germany will have to spend an annual €20bn until 2050 to reduce greenhouse gas emissions by 80% compared with 1990, and raise the share of electricity from renewable sources from 16% this year to 80% in 2050. The coalition pledged €5bn in subsidised loans for ten offshore wind parks and smart grids.

There will be subsidies for efficiency improvements in buildings. After protests from house owners, mandatory energy saving measures and a goal of achieving 100% zero-emission buildings by 2050 was deleted. Green groups criticised this move.

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