Germany's federal and state governments fail to agree on renewable energy reform

After an unsuccessful meeting, Germany's federal and state governments have a difficult road ahead as they deliberate reforms of the promotion of renewable energy. 

The Grand Coalition is also facing problems of its own.

Premier ministers of Germany's 16 states met in the Chancellery in Berlin on Tuesday evening to discuss the planned reform of the Renewable Energy Act (EEG).

At the heart of the dispute is the scale and pace at which renewable energy sources are expanded over the next decade. By 2025, the federal government wants 40 to 45 percent of electricity to be provided by green power sources. 

The share currently stands around 30 percent. In addition, the federal government also wants to link the promotion of wind and solar energy, as demanded by the EU, in tenders.

Both costs and shortages of power lines remain problematic for Germany's 16 states, each of which has different interests. 

While solar energy and biomass is important for Bavaria in the south, wind energy is more heavily relied upon in the north and other parts of Germany.

End of 'good intentions'

Volker Kauder, leader of the Christian Democrat faction in the Bundestag - Germany's lower house of parliament - called on Tuesday for a comprehensive reform of the promotion of renewable energy.

The "good intentions" of promoting wind farms are no longer relevant as they don't provide enough energy to the grid, Kauder said. 

Current customers already have to pay 25 billion euros ($27.8 billion) in support of green electricity as part of EEG reallocation charge.

"It must be clear: network expansion, connection, and power must be brought together," Kauder said, adding that power which isn't reaching the grid can no longer be paid for.

"The EEG has been created to finance and get renewable power off the ground - and not for the main part to operate structural policy or implement federalism interests," Kauder said.

Time pressure

Prior to the meeting on Tuesday, German Chancellor Angela Merkel also called for the construction of more power lines to improve the transition to renewable energy.

"[This] will only happen when, in the end, power is sent through the lines to where it is needed," Merkel said.

With summer recess just weeks away, the German government is under growing pressure to agree on a reform package. 

Failing to do so could also affect the start date for the reform to be implemented. Berlin has already agreed upon January 1, 2017, with the EU Commission.

Unhappy Union

The meeting between the federal and state governments on Tuesday came amid reports of growing differences of opinion between Merkel's Christian Democrats (CDU) and its Bavarian sister party, the Christian Social Union (CSU).

Merkel met with CSU leader Horst Seehofer for a crisis meeting following the publication of a new opinion poll, which found that voter acceptance of Merkel's three-party Grand Coalition, which includes the Social Democrats (SPD), has fallen below 50 percent for the first time.