Germany Grapples with Switch to Renewables

From Financial Post

By Christoph Steitz and Vera Eckert

The challenges of shifting to renewable energy, such as costs, regulation, financing, and poor reliability, will loom large for Germany’s energy leaders this week when they meet to discuss the country’s boldest infrastructure project since reunification.

Chancellor Angela Merkel’s decision, after Japan’s Fukushima disaster two years ago, to abandon nuclear energy and switch to more renewable sources like wind and solar power, is being watched the world over as a possible model for others to follow.

With an estimated price tag of 550 billion euros ($735 billion), many analysts believe that if anyone can make the planned transition to more climate-friendly energy, it is Europe’s most powerful economy.

Delegates attending this year’s Handelsblatt energy industry conference, beginning on Tuesday, know the stakes are high – not least for Merkel, who will be judged on the policy when she seeks a third term in national elections in September.

But so too are the challenges, including the costs and disruption to energy firms and consumers, a lack of financing from banks and question marks over regulation, as well as the reliability of renewable energy for an industrialised economy.

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