By Andrea Thomas
BERLIN (Dow Jones) — Federal Minister of Economics Robert Habeck (Greens) wants to examine proposals according to which there could be state guarantees for investments in green electricity systems in order to increase the expansion of production capacities. It is important to rebuild the production of such systems in Germany. Industry representatives pushed for state support.
Following the 2nd roundtable on “expansion of production capacities for the energy transition” with representatives from the industry, Habeck said that proposals from the industry would be checked for such guarantees in order to bridge the time until projects were approved and thereby facilitate expansion of wind and solar projects.
“If the production of plants only starts up when the order is there, but the order is only awarded when the permit is there, but the permit is still taking a while, then it might make sense for the state to step in there with a guarantee and says: You can order before the approval is there,” said Habeck. Then the ramp-up of the industry will run faster.
His house will now check whether such guarantees are legally possible, said Habeck. This instrument was suggested by the industry in a direct discussion. Hermann Albers, President of the German Wind Energy Association, and Jörg Ebel, President of the German Solar Industry Association, also took part in the consultations.
Habeck wants a new capital model for the industry
Habeck emphasized that the general goal was to build a functioning market. “Now through this phase, we will need government action to support confidence in the markets and actually set the incentives for markets to thrive,” Habeck said.
The aim is also to develop and strengthen innovative strength in Germany and Europe. Fast project approvals, the designation of sufficient areas for photovoltaic and wind power plants, but also sufficient investments played a role here.
Habeck explained that the federal government wants to design a new capital model – a hybrid capital that represents a mixture of equity and debt capital and is tailored to the industry. “Of course we need a reliable investment environment,” said Habeck.
In addition, Germany wants to work at European level to ensure that direct funding is made possible. Platforms for transformation technologies are being targeted here, which will promote the expansion of green electricity systems on a large scale through direct grants.
The solar and wind power industries are pushing for government support
After the talks, Ebel emphasized that the financing of the planned investments in the billions had to be secured. There is location competition not only with China, but also with the USA. It is important to strengthen production capacities in Germany. Smart instruments are needed in Germany and Europe in order to survive in this competition, said Ebel.
So you have to strengthen the home market, secure capital resources and provide cheap green electricity for production, as Ebel demanded at the joint press conference with Habeck.
Albers emphasized that the task now is to promote the rebuilding of a European renewable industrial strategy. Investments in the billions are due in the coming years. “It has become clear today that companies expect the federal government to play a supporting role. The instruments that the federal minister has just presented are supported by the industry,” said Albers.
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DJG/aat/apo
(END) Dow Jones Newswires
November 21, 2022 08:07 ET (13:07 GMT)